Indonesia's Tax Authority Embraces AI for Enhanced Revenue Collection

Leveraging Technology for Tax Compliance

Indonesia's Directorate General of Taxes (DJP) under the Ministry of Finance is actively exploring the use of Artificial Intelligence (AI) to improve tax revenue collection. In a significant development, the DJP revealed that an AI-powered compliance detection system trial identified potential hidden taxes amounting to Rp 20 trillion from the Crude Palm Oil (CPO) sector in North Sumatra.

AI-Powered Tax Detection System

The AI system was developed by tax officials at the Madya Tax Office in Karawang, led by Joko Ismuhadi. This technological innovation represents a crucial step in the DJP's efforts to modernize its tax collection mechanisms and reduce the tax gap. The successful trial demonstrates the potential of AI in enhancing tax compliance and revenue collection in Indonesia.

Implications for Indonesia's Tax Revenue

The discovery of potential hidden taxes worth Rp 20 trillion in the CPO sector highlights the significant revenue opportunities that can be unlocked through the use of advanced technologies. This development is particularly noteworthy given the ongoing efforts by the Indonesian government to optimize tax revenue and improve fiscal management. The DJP's adoption of AI technology is expected to play a critical role in achieving these objectives.