The Indonesian Supreme Audit Agency (BPK) reveals potential shortcomings in tax collection for the year 2023 after discovering indications of trillions rupiah in taxes that have yet to be deposited into the state treasury due to weaknesses in the country’s tax control and compliance systems.
The agency’s first semester 2024 report highlighted discrepancies in tax transactions recorded in the National Revenue Module, specifically pointing to mismatches between reported tax filings, including income tax (PPh) and value-added tax (PPN).
The report indicated that some taxes may have been underpaid, with additional administrative sanctions yet to be applied.
“As a result, there is a potential or indication of tax shortfall amounting to Rp5.82 trillion (US$372 million), along with administrative penalties of Rp341.8 billion,” the BPK stipulated in the report, as quoted on Thursday, October 23, 2024.
In response to these findings, the BPK has recommended that the Ministry of Finance enhance its tax information system to ensure better integration between subsystems, producing more reliable data.
The BPK also evaluated fiscal transparency in 2023. It reviewed 83 financial reports from ministries and government agencies (LKKL) as well as one from the state treasurer’s office (LKBUN).
The audit yielded a clean audit opinion (WTP) for 79 LKKL and one LKBUN, while four LKKL received a qualified opinion (WDP).
Overall, 95 percent of LKKL and LKBUN financial statements earned a WTP rating, while 5 percent received WDP. These results are in line with the government’s target set in the National Medium-Term Development Plan (RPJMN) 2020-2024, which aimed for 95 percent WTP by 2023.
“This achievement reflects the government’s efforts and BPK’s role in promoting effective, accountable, and transparent management of public finances,” the BPK noted in its report.
