Ease of Administration in Tax Obligations in the Industrial Era 4.0

Fitria Arianty

Tax Administration, Vocational Education Program, Universitas Indonesia

Keywords: Ease of Administration, Tax Obligations, Online Tax System

Abstract: At present the impact of the 4.0 industrial revolution on taxation can be seen in various forms of taxation

services with online systems in fulfilling various tax obligations. Application-based taxation services that can

be accessed by taxpayers include e-registration, e-filing, e-billing and e-invoicing, and Indonesia will continue

to expand application-based tax services to fulfill other tax obligations. This paper discusses about the

principle of ease of administration in fulfilling various tax obligations in the face of the industrial era 4.0. The

research methodology used is descriptive analysis, data obtained from literature studies and documentation

studies. The results of the study show that the advancement of information technology in the industrial

revolution 4.0 can be used to build a better, more integrated, more efficient and accountable tax administration

so that it can simplify tax administration. The things that must be considered, the industrial revolution does

not change the basic principles of taxation such as equity, certainty, convenience, and economy. The practical

implication of this study is that tax officers are expected to be able to take advantage of the momentum of

industrial revolution 4.0 by increasing internet-based tax services so that the fulfillment of tax obligations

becomes easier and more efficient

1 INTRODUCTION

At present various countries in the world are

improving themselves in order to welcome the 4.0

industrial revolution, which is marked by the

increasingly reduced role of humans in a number of

types of work because it is replaced by mechanical

technology. The Industrial Revolution 4.0 has

presented a digital era in a number of aspects of

human life. The emergence of various online

applications for transportation, shopping, traveling

and so on has changed the daily lifestyle of people in

various parts of the world. Progress in technology on

the one hand is proven to be able to increase the

efficiency and productivity of the community, but on

the other hand it must be wary of the possible

implications of the increasingly dominant use of

technology.

For the business world, the digital revolution will

break through the traditional marketing channels by

utilizing an increasingly unlimited world. On the one

hand, space for expansion and efficiency is

increasingly wide open. On the other hand, digital

globalization provides a myriad of access to

information that can be confusing or even misleading.

Therefore, planning is key. By understanding the

shifts, roles, and effects created by industry 4.0,

businesses can design business strategies that are in

line with the dynamics that occur (Gunadi, 2018)

Changes in business patterns, business models,

and transaction models using technological

advancements also affect the tax provisions in a

country. With the birth of the 4.0 industrial

revolution, it has demanded reforms in the tax

administration system in each country so that it can

be adapted to technological advancements in this

digital era. Taxpayers in various countries of the

world certainly expect that with advances in

technology, it will make it easier for taxpayers to

fulfill various tax obligations. Taxpayer registration

system to obtain Taxpayer Identification Number, tax

payment system, tax reporting system and tax

collection or deduction system must be adjusted to

existing technological advances. For that various

countries in the world have implemented various

forms of ease of tax administration by utilizing

electronic media in various forms of online

applications. E-registration, e-payment, e-billing, e-

filling, are some forms of electronic applications that

can be used by taxpayers to fulfill their tax

obligations.

Arianty, F.

Ease of Administration in Tax Obligations in the Industrial Era 4.0.

DOI: 10.5220/0010030600002967

In Proceedings of the 4th International Conference of Vocational Higher Education (ICVHE 2019) - Empowering Human Capital Towards Sustainable 4.0 Industry, pages 75-83

ISBN: 978-989-758-530-2; ISSN: 2184-9870

However, the success of the policy transformation

process in a country depends on the creation of ethical

rules and norms that can increase public trust. Within

the scope of taxation, the transition of systems from

conventional to digital must be accompanied by the

preparation of qualified regulations that can

accommodate the aspirations of all parties, without

prejudice to the interests of the state. Things that must

be considered, the industrial revolution does not

change the basic principles of taxation such as

equality, certainty, comfort and economy (Hutagaol,

2018)

2 LITERATURE REVIEW

2.1 Previous Research

The use of information technology has given a new

perspective to the development and integration of

Malaysia’s tax administration system. Tax

administrators understanding of the e-filing system

will improve the level of service provided and

encourage the users of the system to continuously use

it which will lead to the increase in revenue

generation. E-filing system as a whole integrates tax

preparation, tax filing and tax payment, which serves

as a major advantage over traditional manual

procedure (Springer,2018)

Online tax system has received a great attention

globally through the development of information

technology, which affects the tax administration

system. With the emergence of information

technologies (IT), it is possible for the tax

administrators to improve tax administration system

by creating awareness about their tax structure that

most of the taxpayers have limited knowledge about

Information technology is making advancements and

services offered to the citizen are getting unassuming.

The use of information technology has given a new

perspective to the development and integration of

Nigeria's tax administration system. Tax

administrators understanding of the online tax system

(OTS) is to improve the level of the service provided

and encourage the users of the system to comply

which lead to the increase on revenue generation

(Bojuwon, m, 2018)

The main objective of any tax administration is to

collect taxes and duties payable according to the laws

of the land. Strong tax administration is a requisite for

ensuring high compliance and administering tax

policies efficiently. A good tax administration is

premised upon a well-designed tax system and strong

technical capacity. An essential objective of tax

administration is to ensure the maximum possible

compliance by taxpayers of all types with their tax

obligations (Olaoye, C.,2017)

The findings show that the tax service quality is

an important determinant for the usage of the online

tax system that provides relevancy to the tax

administration system. Furthermore, there is a

significant positive relationship between tax service

quality and online tax system. The implication of this

study is by introducing a new variable perceived ease

of use to mediate online tax system shows a

significant effect on the online tax system. Secondly,

the policy implication of this study is that by

providing quality tax service to the taxpayers and the

ease of use of the system have led to increase in

revenue generation with clear effect on the economy

(Mustapha, B, 2015)

With the development of AI technology, a new

forecasting and statistical model for tax auditing has

been created. In recent years, thanks to breakthroughs

in AI research, tax professionals have gained new

analytical and statistical tools, providing convenience

and improving efficiency. To understand how AI is

applied in taxation, Cas Milner and Bjarne Berg

(2017) believe that AI’s role in taxation is like a

software that can automatically adapt to the input of

different content and make judgments without

specific instructions. There are many prospects for

applying AI in taxation. However, at present, AI is

still developing, and the AI system is not able to

update itself since manual adjustments are needed. In

turns of data input, integration and tax reports

preparation, AI system in taxation can be still more

advanced (Business, Z. H.-A. J, 2018)

In relation with government policies in taxation,

the tax revenue would be enhanced by modern tax

administration to improve the performance of tax

administration either for individuals, groups or

institutions to be more efficient, economical, and fast.

The office can benefit the development of

information technology so that the goal of a modern

tax administration can be achieved. To organize a

modern tax administration, the Directorate General of

Taxation performs the application of information

technology through online tax administration. Online

tax administration includes e-registration, e-spt, e-

filling and e-billing. From the aspect of the tax

officials performance, the online system can also

reduce the cost of manual entry processing, human

errors, as well as reducing the time for processing

income tax return (Yusup, M., Hardiyana, 2015)

New technology was introduced to improve tax

and customs administrations; examples include

ICVHE 2019 - The International Conference of Vocational Higher Education (ICVHE) “Empowering Human Capital Towards Sustainable

4.0 Industry”

compulsory e-filing of tax returns and proprietary

software to spot irregularities and trigger tax audits.

To ease the bureaucratic burden for small businesses,

simplified tax keys were introduced, e.g., based on

the number of chairs at a barbershop or the number of

tables at a restaurant. Specifically, the government

vowed to create a transparent system of rules that

would spur on both domestic entrepreneurship and

foreign investment. The key was simplicity (Gilauri,

N, 2017)

In an industrial world where change has always

been present and where progress has since forever

represented the humankind’s ultimate goal that will

never be entirely achieved, it is fundamental to keep

up with times and stay aware of new, ground-

breaking ways of performing manufacturing

activities and conduct a successful business. After

three page-turning industrial revolutions, the world

has now found itself – according to many – at the edge

of a fourth one also known as “Industry 4.0”, that will

potentially break the current status quo equilibrium

once again (Bragagnolo, H, 2017)

The results have important implications for tax

policy and tax administration in developing countries.

The first points to limitations in the adoption of softer

approaches to tax administration that attempt to

encourage tax compliance by leveraging tax moral

factors in a context of major enforcement deficiencies

- example weak legal framework and corruption. A

lax enforcement framework may tend to negate the

positive compliance effects of taxpayer services and

other nonpecuniary factors. We argue that a strong

legal enforcement framework is required if non

pecuniary factors more generally, and taxpayer

services in particular are to be effective in improving

compliance (Small, O, 2017)

With the growth in the complexity of tax systems,

trade and capital liberalisation, advances in global

communication technologies and the size of

taxpaying populations, tax administration has become

an increasingly difficult challenge. In this

environment, aggressive tax planning opportunities

flourish whilst tax authorities are not sufficiently

resourced to check the tax affairs of all, or even most,

taxpayers. The response of some tax administrators

has been to focus on maximising voluntary

compliance by the bulk of taxpayers whilst applying

limited enforcement resources on the recalcitrant

minority (Dabner, J., & Burton, M, 2015)

Those who are friends of good tax administration

might find the following course realistic without

being fatalistic: (1) continue to advocate for good

ideas, creating an intellectual record that can justify

change at the opportune moment; (2) when the winds

of public choice opposition blow hard, energy and

avoid discouragement; (3) when the gale subsides or

when political circumstances direct the wind in

favorable direction, seize the moment to push hard for

the changes already justified intellectually; and (4)

compromise but not to the point of sacrificing core

principles of taxation (Johnson, S. R, 2016)

Tax systems in developing countries, like those in

more developed countries, face both new challenges

and new possibilities as a result of technological

change. In developing countries, taxpayers and tax

administrations must cope with more difficult

environments with fewer resources. Some issues

(such as privacy, the benefits and costs of

public/private partnerships, and corruption) are

common to both developing and developed countries,

but differ in relative importance in particular

countries. Other issues (such as how new technology

may or should influence the way a country’s tax

system or particular taxes are designed and

administered) may be more important in developing

countries (Bird, R, 2008)

2.2 Theoretical Framework

2.2.1 Tax Compliance

Taxpayer compliance by Salamun A.T. (Salamun AT,

n.d.) defined as the fulfillment of tax obligations

(ranging from cal-culating, levying, cutting,

depositing to report tax obligations) by taxpayers in

accordance with legislation- tax invitation appli-

cable.

There are two kinds of tax compliance:

1. Formal Compliance:

Taxpayers meet formal compliance based on tax laws

and regulations. For example, the provision of the

limit for submission of the Annual Tax Return (SPT)

of an individual on March 31, if the individual

taxpayer has reported the Annual Income Tax Return

by March 31, then the taxpayer has complied with the

formal requirements.

2. Material compliance:

Wider than formal compliance, because material

compliance also includes formal compliance. For

example, an individual taxpayer has reported the SPT

on time (not late), but the mate-rial requirement is not

necessarily fulfilled because the taxpayer must fill the

SPT honestly, correctly and completely in accord-

ance with the provisions

There are several factors that can affect tax

compliance, namely compliance cost, tax regulation

and law enforcement. The level of tax compliance

Ease of Administration in Tax Obligations in the Industrial Era 4.0

increases when all three factors are controlled

adequately. Conversely, if compliance costs are high,

complex and unclear tax relations or differences in

interpretation, and poor law enforcement can lead to

declining tax compliance rates. The three factors are

as follows:

1. Compliance Cost

Compliance cost is fees other than tax payable paid or

issued by the taxpayer in order to fulfill the tax

obligations. Compliance cost consists of direct

money cost, time cost and psychological cost.

a. Direct money cost is the real cost incurred by the

taxpayer in the framework of fulfilling the tax

obligation, including pay-ment to accountant, tax

consultant and travel expense to the place of deposit

and tax reporting.

b. Time cost is used by the taxpayer in order to fulfill

the tax obligation causing the opportunity loss,

starting from the time spent to study the tax

calculation until the time to report the tax and

accountable for the fulfillment of tax obligation that

has been done.

c. Psychological cost is anxiety, worry, and fear of the

taxpayer in fulfilling the tax obligation and interact

with the tax officer.

2. Tax Regulation

Clear, easy and simple tax laws and regulations and

do not re-sult in different interpretations for tax

officials and taxpayers will increase tax compliance.

Conversely, by complicated laws, obscure or

conflicting rules of conduct have the potential to

generate tax-payer apathy that will affect tax

compliance levels

3. Law Enforcement

Law enforcement is the implementation of

regulations implemented by the tax officer not

according to the provisions. Adequate regulatory

implementation by promoting justice principles (ie

different treatment for different conditions or equal

for the equals and different treatments for different

conditions unequal for the unequals) and carried out

consistently will support the achievement of an

optimal tax compliance condition.

Ease of Administration

The ease in administration is a very important

principle in the tax collection system (Rosdiana,

Irianto, 2012). This affects the level of public

awareness in carrying out each of its tax

obligations.There are several indicators in the

principle of ease of administration:

a) Certainty : stating that there must be certainty from

taxpayers as well as tax officers regarding the tax

subject, tax object, tax base, tariff and how the tax

procedure is.

b) Efficiency : In terms of fiscal: The cost of

supervising and administering taxpayers is relatively

low. In terms of taxpayers: Costs for implementing

tax obligations are relatively low

c) Convenience of Payment : Tax is collected at the

right time (Pay As You Earn)• Determination of the

due date of tax payments• Payment proceduresd)

d) Simplicity : Easy to implement and not

complicated

In "The Encyclopedia Americana", the principles of

certainty, convenience, and economy are included in

one principle, namely the administrative principles,

as quoted below:

The administrative principles of taxation are those of

certainty, of convenience, and of economy

"The New Encyclopedia Britannica" also includes

these principles as criteria of ease of administration

and compliance (criteria for ease of administration

and compliance). In the book the criteria for ease of

administration and compliance are expanded to

become clarity, continuity, cost effectiveness and

convenience, as quoted below:

In discussing these general principles one must

lose sight of the fact that taxes have to be

administered. This imposes certain limitations on the

fiscal process. There are four general requirements

for the efficient administration of tax laws: clarity,

continuity, cost-effectiveness and convenience

2.2.2 The 4.0 Industrial Revolution

What is really the industrial revolution 4.0? Prof.

Klaus Martin Schwab, German technician and

economist, who is also the founder and Executive

Chairman of the World Economic Forum, who first

introduced him. In his book The Fourth Industrial

Revolution (2017), he mentions that at the moment

we are at the beginning of a revolution that

fundamentally changes the way of life, works and

relates to one another. The change is very dramatic

and occurs at exponential speeds. Changes that were

very influential in life were compared to the previous

industrial revolution era. The 4.0 Industrial

Revolution was marked by the development of the

Internet of / for Things, its presence was so fast.Many

things that were unthinkable before, suddenly

appeared and became new innovations, and opened

up a very large business area.

Expert Opinion on the Industrial Revolution 4.0.

There are some expert opinions about the 4.0

industrial revolution, the first according to Jobs Lost,

Jobs Gained: Workforce Transitions in Time of

Automation, which was released by the McKinsey

Global Institute (December 2017), in 2030 as many

as 400 million to 800 million people have to find new

jobs , because it was replaced by a machine.The

second opinion, according to the Minister of National

ICVHE 2019 - The International Conference of Vocational Higher Education (ICVHE) “Empowering Human Capital Towards Sustainable

4.0 Industry”

Development Planning, Bambang P.S. Brodjonegoro,

has the same opinion as McKinsey & Co. According

to him, entering the industrial revolution 4.0

Indonesia will lose 50 million job opportunities. The

third opinion, according to the Minister of Industry,

Airlangga Hartarto, on the contrary. The industrial

revolution 4.0 gave an opportunity for Indonesia to

innovate. The revolution which focused on

developing the digital economy was considered

beneficial for Indonesia. Digital economy

development is market and talent, and Indonesia has

both. He does not agree that the industrial revolution

4.0 will reduce labor, on the contrary it increases

efficiency.

3 RESEARCH QUESTION

To discuss more deeply about the ease of tax

administration in fulfilling tax obligations in the

industrial era 4.0, the research questions in this paper

are as follows:

1. How is the ease of tax administration by using

online tax system in the industrial era 4.0 in

several countries?

2. What are the possible implications of the use of

online tax system in tax obligation in the

industrial era 4.0?

4 METHODOLOGY

This paper is descriptive analysis, data collection

obtained from documentation studies and literature

review. This research is a qualitative research

descriptive. Qualitative research is a research that

produces descriptive data in the form of written words

or spoken of people and behaviors that can be

observed. Descriptive is the data collected in the form

of words, images, and not numbers. The type of data

used is the secondary data in the form of tax laws

prevailing in Indonesia, supporting documents and

previous research results by analyzing several

journals with the theme of the use of electronic form

to fulfilling tax obligations in many countries. The

literature data are collected and then analyzed by

understanding how the interpretation of the authors in

providing feedback on the problems of ease of

administration in tax obligations in the 4.0 industrial

era. Other data was obtained from presentations and

material presented by the speakers at the seminar

relating to the theme of taxation in the digital era.

5 RESULTS AND DISCUSSION

5.1 Ease of Tax Administration by

using Online Tax System in the

Industrial Era 4.0 in Several

Countries

5.1.1 Malaysia

The use of information technology has given a new

perspective to the development and integration of

Malaysia’s tax administration system. Tax

administrators understanding of the e-filing system

will improve the level of service provided and

encourage the users of the system to continuously use

it which will lead to the increase in revenue

generation (Mustapha & Obid, 2015). E-filing system

as a whole integrates tax preparation, tax filing and

tax payment, which serves as a major advantage over

traditional manual procedure (Ambali, 2009). Since

its introduction in 2006, e-filing has evolved each

year in order to provide better service to the

taxpayers. The online tax system makes an effective

impact on the economic towards improving the level

of income generation and tax compliance by the tax

payers. This could be due to benefits provided by e-

filing system such as convenience, time saving, cost

effectiveness for both the tax administrator and tax

payers (Mustapha & Obid, 2015).

A local study has indicated that any technological

devices provided in enhancing the service boundary

between the government and its citizen must be found

to be useful. Thus, e-filing system must be seen as a

better alternative by the taxpayers in submitting their

income tax in terms of time, cost and convenience

compared to manual submission; failure on this will

lead the taxpayers to abandon the system in the long

run (Ambali, 2009). Moreover, based on the findings

of this study, perceived usefulness partially mediates

the relationship between the dimensions of

correctness and response time towards e-filing

continuance usage intention. This implies that

correctness and response time had a direct and

indirect influence on taxpayers’ continuance usage

intention of the efiling system. It appears that the

system that works properly and produces correct

output and a short and reasonable response time is not

only able to determine the usefulness of the e-filing

system but also affect their intention to continuously

use the system (Spinger, 2018).

From the description above, it can be seen that the

use of information technology in tax administration in

Malaysia has proven to provide convenience for

Ease of Administration in Tax Obligations in the Industrial Era 4.0

taxpayers to fulfill various tax obligations. With the

use of electronic media, tax administration in

Malaysia has become easier, more effective and

efficient compared to manual systems. Taxpayers in

Malaysia are interested in continuing to use the e

filling system because it is more appropriate in

calculating taxes and also saving more time. Online

systems that are running well, accurate results, and

time efficiency seem to greatly influence the

continued use of e filling systems by taxpayers in

Malaysia.

5.1.2 Nigeria

Online tax systems are growing in today’s world as

part of e-government services with the objective of

achieving efficiency in tax collection and

administration. In general, an online tax system

represents a new method of tax payment that no

longer requires taxpayers to physically go to the tax

authorities to file and pay their taxes (Ozgen & Turan,

2007). . This study examined the usage of the online

tax system by self-employed tax payers in Nigeria.

Nigeria is one of the countries in the world, where

there is a high administrative burden in its tax system

(Odusola, 2006). Generally, the tax authority

(Federal Inland Revenue Board) is responsible for all

the activities of tax related issues in Nigeria.

Therefore, the views of the tax administrators and the

self-employed taxpayers in the tax administration

setting on the use of online tax system would be more

useful than the manual filing system.

The assessment of items measuring the construct

perceive security, shows for taxpayers to effectively

use and innovation like online tax system of filing

return , it will first consider how secure is the

innovation toward it data based on the loading these

items have the highest loading on the perceived

security construct. This is the reason since this is the

first thing that a potential taxpayers will consider and

it is a rough indication of what is expected from the

tax administration. After the consideration by the

taxpayers on the security of their data they further

think on the level of their ability to secure the

protection of their information for a very long time.

Finally, the security of the information disclose about

the taxpayers should be keep secure from other

taxpayers interim of the security code and the

password related to the use of online tax system by

the self-employed taxpayers.

The discussion of this study is in a logical

sequence looking at the construct perceived ease of

use that measure how ease is the innovation for the

taxpayer to use in filing their tax return the item with

the highest loading is the one with that relate to the

easy use of the application when taxpayers trying to

applied for claim of refund from the tax office

through the system. The third construct is related to

perceived usefulness of online tax system. It has to do

with the benefit derived from the use of the system.

Looking at the construct online tax system that

measure the usage of the online tax system based on

the service provided by the tax administration, the

items with higher loading is the one that relate to how

the use of online tax system save time the self-

employed taxpayers used in filing in their taxes.

However the reason is that why taxpayers file in their

tax through the use of online tax. It is noted that the

variables in used are correlated and were eventually

merged as the final model of the structural model. The

seven hypotheses developed based on the model were

statistically significant in this study. As indicated all

the path coefficients from the perceived security,

perceived ease of use and perceived usefulness are

statistically significant at 95 percent level of

confidence interval. On the practical important, the

variables are significant with (≥.2) with a positive

direction. The implication of this model is that the

constructs of perceived security, perceived ease of

use and perceived usefulness are all predictor of the

usage of online tax system in the context of Nigeria

tax administration system (Bojuwon, Abidoye,

Agbaje, 2017).

With advances in technology, the tax

administration system in Nigeria has turned to an

online tax system because it is more secure, easier,

and more beneficial for taxpayers in Nigeria.

5.1.3 Indonesia

The Directorate General of Taxes (DGT) Indonesia in

recent years has been increasingly aggressively

campaigning for the use of online system in fulfilling

taxpayer duty obligations. The socialization to use

online media is carried out in various ways, from

advertising on television, online media, websites,

radios, posters, banners, billboards, and also through

delivering directly to taxpayers through extension

activities.

As has been applied in other countries, Indonesia

also implementing online tax administration in

fulfilling various obligations of taxpayers. e-

registration, e-filing, e-form, e-billing, e-faktur, and

e-bupot are examples of online tax administration that

has been implemented in Indonesia. E-registration is

a tax registration through online system, while e-spt

refers to the annual notification letter in connection

with tax bills online. In addition, e-filing is a

submission to deliver tax returns electronically which

is easier, faster and safer, e form is a way of delivering

tax returns by using electronic forms, and e-billing is

ICVHE 2019 - The International Conference of Vocational Higher Education (ICVHE) “Empowering Human Capital Towards Sustainable

4.0 Industry”

tax payment done electronically through bank

perception that has been set by the government. The

latest application from DGT Online that is ready to be

implemented is e-bupot, which is a means of making

proof of withholding taxes electronically for tax

withholder integrated with the DGT online with an

electronic signature feature.

E-filing and e-form is one form of modernization

of the tax administration system carried out by DGT

as an effort to improve tax compliance. With the

application of the SPT reporting system electronically

through both e-filling and e-forms, it is expected that

taxpayers will be on time in reporting and paying

taxes which are their obligations. In addition to the

modernization of the tax administration system,

enforcement of rules is also needed to encourage

taxpayers to switch from manual reporting systems to

electronic tax reporting. Issuance of PMK No. 9 /

PMK.03 / 2018 concerning amendments to PMK

No.243 / PMK.03 / 2014 concerning Notification

(SPT) also play a role in encouraging taxpayers to

submit Annual Tax Returns electronically. In the

regulation it is stipulated that taxpayers who have

reported SPT (period or annual) electronically are

required to report the annual SPT electronically for

the Annual Tax Return PPh 2018 and so on. So that

taxpayers who are status as Taxable Entrepreneurs

(PKP) certainly have to report the Annual Tax Return

PPH 2018 electronically because every month they

have reported VAT Periodical Tax Returns

electronically.

Currently the Directorate General of Taxation is

carrying out tax reforms. The aim is to become a tax

institution that is strong, credible and accountable to

produce optimal state revenues. Supported by five

main pillars: ideal organizational structure;

professional, competent, credible, human resources

with integrity; IT and database that are reliable;

simple, effective, efficient, accountable, IT-based and

comprehensive business processes; and finally,

regulations that guarantee legal certainty, in the future

Indonesia will still develop electronic-based tax

administration service products in one integrated

single account, known as e-tax payer account (e-

TPA), a single account to provide convenience to

taxpayers. This e-TPA application is an answer to the

challenges of disruptive technology in the industrial

era 4.0. With the e-TPA all database of the taxpayers

will be recorded in one application, starting from the

identity of the taxpayer, the amount of tax payments

that have been made, the amount of tax arrears, the

number of tax bills, and administrative sanctions that

must be paid by the taxpayer. Through the same e-

account, the tax office can send notifications relating

to taxpayer’s taxation rights and obligations. For

example, appeals for tax obligations that have not

been implemented, legal products as a result of

inspection, tax assessment letters, and tax bills.

Taxpayers can track the current status of requests

submitted by taxpayer, such as restitution, objection

or non objection. e-TPA is expected to build trust

between the tax authorities and taxpayers by creating

data transparency.

5.2 Possible Implications of the Use of

Online Tax System in the Tax

Obligation in the Industrial Era 4.0

The use of information technology with online

systems in tax administration certainly has an impact,

both positive and negative impacts. The progress of

information technology in the industrial revolution

4.0 can be used to build better tax administration

where business processes are more integrated, more

efficient and accountable so that they can reduce

administration costs. From the economic aspect, tax

administration by using online system will reduce

compliance costs for taxpayers.

The OECD (2017) in its research emphasized that

the taxation system must be transformed and change

continuously in accordance with the rapid advances

in technology and digitalization, as well as the

development of business patterns. The main objective

is to increase the effectiveness and efficiency of

taxation, or reduce costs and improve voluntary

compliance of taxpayers, so as to encourage

economic growth and investment. The ideal taxation

system in the digital era according to the OECD is the

following criteria: (1) globally connected; (2)

technologically enabled; (3) collaborative and

integrated (collaborative and integrated); (4)

prioritizing data and insight (data and insight led); (5)

better information compliance management; have

qualified human resources (enabled workforce); (6)

and lastly, continue the transformation and continue

to change significantly following the trends in digital

technology and the latest business.

Benefits to be gained if the tax payers conduct

transactions via e-billing include easeness as well as

fast and accurate process. Hence, tax payers can make

tax payment transactions quickly and anywhere,

because it is done through bank perception by

entering the code of billing of tax payments based on

the data they input on the e-billing. This will allow

the taxpayers in charging the Tax Payment

electronicaly and correctly according to their tax

transactions, so that the payment data errors, such as

the Tax Account Code and Code Type Deposit, can

Ease of Administration in Tax Obligations in the Industrial Era 4.0

be avoided and data entry errors, which were initially

common, can be minimized (Yusup, M. Hardiyana,

2015)

Digitizing the tax reporting system makes

taxpayers not need to linger in line at the Tax Service

Office (KPP) or the Tax Consultation and

Consultation Office (KP2KP) to report their Annual

SPT. Electronic annual SPT reporting via e-filing or

e-form allows taxpayers to report SPT anywhere and

anytime.

Information technology integration in the tax

administration results in a majority of taxation

business process activities in the network. If it is

complemented by the conventional taxation process,

the goal of tax reform in 1983 is achieved, namely (a)

simplification of the tax structure, and (b)

administrative depersonalization. Administrative

digitalization can improve the performance of tax

administration in various business processes, such as

service, supervision, billing, law enforcement and

receipts and tax ratios, as well as straightening the

application of the self assessment system with

voluntary compliance in accordance with tax law

(Gunadi, 2018).

The use of information technology with online

systems in tax administration does not always have a

positive impact. There are also negative impacts

caused. The first use of an online system requires the

existence of a wide range of internet networks with a

stable speed. For this reason, the state must provide

adequate infrastructure so that all taxpayers in any

part of the region can use the internet network

smoothly. Need a lot of funds for the government to

be able to provide these facilities. In addition, with

high internet usage, it certainly causes high electricity

usage. The negative impact of this high electricity use

is to further draining the source of electricity, and

make the temperature of the earth increasingly hot

which can ultimately increase global warming.

In the case of Indonesia, in 2018 the online DGT

system had experienced problems at the deadline for

reporting annual tax returns. As of March 31, 2018,

which is the deadline for reporting annual tax returns

for individual taxpayers, the online DGT system is

down due to overload in the use of the online system.

At that time there was a deadlock in reporting online

tax returns that took several hours to be repaired.

Thus the good faith of taxpayers to report on timely

tax returns is delayed. Taxpayers are worried that they

will be subject to late sanctions in reporting tax

returns, even though they are not caused by their

negligence. To overcome the taxpayer's concerns, the

DGT finally took a decisive step by issuing a Circular

Letter containing an extension of the deadline for

reporting tax returns for individual taxpayers in

connection with the technical obstacles in the online

DGT system.

Second, the use of online tax systems in tax

administration requires that taxpayers must be able to

operate information technology. Governments

especially in Indonesia must realize that the

characteristics of the taxpayer community in

Indonesia are very diverse, with various cultural

backgrounds and diverse levels of education. The

government must see the fact that there are still many

taxpayers who do not understand how to operate

information technology, both in the form of

computers, laptops, gadgets, smartphones, and other

online media. This can be seen from a number of

taxpayers who are still asking for help from officials

in the Tax Service Office or other parties to input their

tax payment data through e-billing or filling in SPT

systems electronically because of their inability to

operate information technology devices. For this

reason, the government, especially the directorate

general of taxes, must try harder to provide education,

training, counseling and so on about the use of online

tax system to taxpayers. This is certainly an additional

burden for the tax apparatus.

Third, the use of online tax systems in tax

administration will certainly reduce interactions

between people, where in this case taxpayers will

interact more with machines than with tax officials.

The impact of this is a lack of communication and a

lack of awareness between tax officials and

taxpayers.

Furthermore, the general negative impact of the

4.0 industrial revolution is that it will reduce

employment for the public in a number of fields of

work, because human labor has been replaced by

mechanical power. Thus it is feared that there will be

a large number of unemployment in the industrial era

4.0. This is what the government in every country

must think about and anticipate in this industrial era

4.0.

6 CONCLUSIONS

From the discussion above can be concluded as

follows :With the industrial revolution 4.0, the tax

administration system in a number of countries was

also adjusted by changing the manual system to an

online system. The online tax system has received

great attention globally through the development of

information technology, which affects the tax

administration system. The use of information

technology has given a new perspective to the

ICVHE 2019 - The International Conference of Vocational Higher Education (ICVHE) “Empowering Human Capital Towards Sustainable

4.0 Industry”

development and integration of tax administration

system. With an online system, taxpayers obtain the

ease of administration in fulfilling various tax

obligations.

The use of information technology with online

systems in tax administration certainly has an impact,

both positive and negative impacts. The progress of

information technology in the industrial revolution

4.0 can be used to build better tax administration

where business processes are more integrated, more

efficient and accountable so that they can reduce

administration costs. From the economic aspect, tax

administration by using online system will reduce

compliance costs for taxpayers. On the other side, the

use of information technology with online systems in

tax administration spending a huge amount of money

to provide an extensive, fast internet network

infrastructure that is evenly distributed throughout the

country, spend large amounts of electricity, reduce

interaction between humans, the government,

especially the directorate general of taxes, must try

harder to provide education, training, counseling

about the use of online tax system to taxpayers. This

is certainly an additional burden for the tax apparatus.

However, the progress in information technology

in the industrial revolution 4.0 can be used to build

better tax administration, but it must be considered

that technological advances in tax administration

should not ignore the principles of tax collection that

are generally accepted throughout the world, namely

equality, certainty, convenience and efficiency

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Ease of Administration in Tax Obligations in the Industrial Era 4.0