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Integrating taxpayer registration into national identification numbers
The basic update that the system will do is NIN data matching between Taxation Directorate General internal data and the population data from the Department of Population and Civil Registration at the Home Ministry.
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Officers serve taxpayers as they fill out tax reporting forms at the Taxation Directorate General in the Sudirman Building in Jakarta on March 11, 2020. (JP/Dhoni Setiawan)
T
he government has begun replacing the 15-digit taxpayer identification number (TIN) with the 16-digit national identification number (NIN) for individuals and corporations, in line with President Regulation No. 83/2021 on the development of the Indonesia One Data system.
The regulation was issued in September 2021 to implement Law No. 7/2021 on the alignment of tax regulations. The TIN and NIN integration also aims at enhancing equality and effectiveness in tax administration.
By January 2024, all individual taxpayers will have to use the 16-digit NIN, corporate and government agency taxpayers will use the new format of tax ID cards, corporate taxpayers will use their current 15-digit TIN with a 0 attached at the beginning of their TIN.
As part of the tax reform, the Taxation Directorate General has designed five transformation pillars to strengthen its organization, improve human resources, develop Information Technology (IT) and databases, simplify the business process and update laws and regulations.
One of the top-priority pillars is strengthening IT and databases, which is crucial to addressing the global disruption of the digital economy. The current DGT system is no longer capable of accommodating the quick transformation of data, applications, innovations and many related matters. Hence, a modern “machine” is needed to store those data and document the whole process.
So how will these tax reforms become feasible?
The Taxation Directorate General will migrate billions of internal datapoints into the upcoming Core Tax Administration System (CTAS), which will be officially launched in 2024. Amid the preparation of IT infrastructure, the tax authority must fix the big data that will fulfill the future CTAS. It needs to ensure that taxpayer data as inputted is valid and updated. This filter is especially needed to avoid spam data entering the system.
