Jakarta, Indonesia Sentinel — Luhut Binsar Pandjaitan, Chairman of the National Economic Council (DEN), has called on President Prabowo Subianto to conduct an audit of Indonesia’s newly implemented Coretax system. Luhut emphasized that the president has the right to assess the issues regarding Coretax.
Luhut described Coretax as a crucial system designed to boost tax revenue and improve Indonesia’s tax-to-GDP ratio, which has stagnated at around 10 percent. He noted that despite a decade of digitalization efforts, Indonesia’s taxation system remains inefficient. The World Bank has even ranked Indonesia’s tax system as one of the least efficient globally.
“It’s been ten years, and Coretax is still not fully operational, why? What’s going on? This needs to be examined. That’s why I suggested the president to just audit it. There’s no law prohibiting an audit and the president has the right to see what’s working and what isn’t,” Luhut said on Wednesday (February 19, 2025), as reported by CNN Indonesia.
The Coretax system, which was launched on January 1, 2025, has encountered technical problems, which remain unsolved. The issues has forced Ministry of Finance implement dual tax report, revert to using the old tax administration system alongside the newly implemented Coretax system.
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Therefore, Luhut insisted that a comprehensive audit would help identify and address these issues. He stressed that Coretax is a key step in reforming Indonesia’s tax system
Optimizing Tax System
Luhut urged all Indonesians to support Coretax’s implementation despite its challenges, arguing that the program is essential for national development. According to the World Bank, Indonesia could potentially increase its tax revenue by 6.4 percent of GDP, approximately Rp1,500 trillion if its tax system were optimized.
“I just ask that all officials, analysts, and stakeholders come together to support this. This is for the good of the Republic,” he added.
In mid-January, Luhut visited the headquarters of the Directorate General of Taxes (DJP) in South Jakarta, where he met with Finance Minister Sri Mulyani Indrawati to express his full support for Coretax. Acknowledging the system’s initial difficulties, he remained confident that Coretax would eventually function smoothly.
Coretax, developed by the Ministry of Finance’s Directorate General of Taxes, aims to enhance tax collection. However, its implementation has faced criticism due to technical and administrative hurdles experienced by taxpayers.
(Raidi/Agung)
