Digital Transformation and Sustainable Local Tax System Practices in Emerging Market: A Qualitative Analysis

Faisal Labib Zulfiqar; Tiffani Silvia; Ali Abrori

doi:10.47134/aaem.v2i2.510

Authors

Faisal Labib Zulfiqar Ministry of Finance, Indonesia
Tiffani Silvia Jakarta Regional Revenue Agency
Ali Abrori Jakarta Regional Revenue Agency

DOI:

https://doi.org/10.47134/aaem.v2i2.510

Keywords:

Digitalization, Property Tax, Notification of Tax Due, Subnational Tax Administration, Sustainable Tax Administration

Abstract

The Covid-19 pandemic has forced regional governments to adapt in providing services, including in terms of taxation. This study deals with the introduction of the electronic Notification of Tax Due of Land and Building Tax at the Unit X, one of the subnational tax office in Jakarta. In a bid to enhance the efficiency, effectiveness and convenience of the processes, and also promote eco-friendliness through paperless practice, the transition from paper-based processes to computerized ones was undertaken. Emphasizing on the electronic Notification of Tax Due system as per Governor Regulation No. 23 of 2021, the system enabled taxpayers to access tax documents as they were uploaded in the electronic platforms and this enhanced the reliability of the notifications while ease the burden of paperwork. The research employed interviews, observations and document analysis of the electronic Notification of Tax Due implementation and found that the emerging system improved the convenience of taxpayers through quick service delivery but also enhanced service quality in a green economy line with SDGs 12, 13 and 15. Nonetheless, the findings revealed a digital divide particularly among the seniors and the economically disadvantaged which calls for the integration of digital literacy policies targeting those groups. Nevertheless, the electronic Notification of Tax Due system stands as a testament the opportunities available in embracing technology in the provision of services, enhancement of sustainability and the involvement of the citizens in the management of a city.

References

Amal, M. I., & Wibowo, P. (2022). Analisis Kinerja Keuangan Pemerintah Provinsi DKI Jakarta Sebelum Dan Sesudah Pandemi Covid-19. Jurnal Pajak Dan Keuangan Negara (PKN), 4(1), 83–93. https://doi.org/10.31092/jpkn.v4i1.1723

Amir, M., Cavallari, L., Cavallari, Z., Witjaksono, J., & Seerasarn, N. (2023). Consistency of Public Service Management in Implementing Good Governance in Indonesia: A Case Study in Kendari City. Academic Journal of Interdisciplinary Studies, 12(6), 176. https://doi.org/10.36941/ajis-2023-0162

Delabre, I., Boyd, E., Brockhaus, M., Carton, W., Krause, T., Newell, P., Wong, G. Y., & Zelli, F. (2020). Unearthing the myths of global sustainable forest governance. Global Sustainability, 3, e16. https://doi.org/10.1017/sus.2020.11

Delardas, O., Kechagias, K. S., Pontikos, P. N., & Giannos, P. (2022). Socio-Economic Impacts and Challenges of the Coronavirus Pandemic (COVID-19): An Updated Review. Sustainability, 14(15), 9699. https://doi.org/10.3390/su14159699

Devano, S., Mulyani, S., Winarningsih, S., & Ghani, E. K. (2023). Tax officers’ perceived relationship of e-taxation use, taxpayer satisfaction and taxpayer compliance. Asian Economic and Financial Review, 13(10), 687–699. https://doi.org/10.55493/5002.v13i10.4848

ElMassah, S., & Mohieldin, M. (2020). Digital transformation and localizing the Sustainable Development Goals (SDGs). Ecological Economics, 169, 106490. https://doi.org/10.1016/j.ecolecon.2019.106490

Feng, G. C., Su, X., Lin, Z., He, Y., Luo, N., & Zhang, Y. (2021). Determinants of Technology Acceptance: Two Model-Based Meta-Analytic Reviews. Journalism & Mass Communication Quarterly, 98(1), 83–104. https://doi.org/10.1177/1077699020952400

Fernando, J., Yulistia, C., Felisia, F., & Purba, Mohd. N. (2021). Pengaruh Return on Investment, Net Profit Margin, Dividen Per Share dan Pertumbuhan Aset terhadap Harga Saham Perusahaan Manufaktur. Owner, 5(1), 38–50. https://doi.org/10.33395/owner.v5i1.334

Feroz, A. K., Zo, H., & Chiravuri, A. (2021). Digital Transformation and Environmental Sustainability: A Review and Research Agenda. Sustainability, 13(3), 1530. https://doi.org/10.3390/su13031530

Galushi, L. T., & Malatji, T. L. (2022). Digital Public Administration and Inclusive Governance at the South African Local Government, in Depth Analysis of E-Government and Service Delivery in Musina Local Municipality. Academic Journal of Interdisciplinary Studies, 11(6), 116. https://doi.org/10.36941/ajis-2022-0154

Harvey, P. D., & Nascimento, V. (2020). Helping older adults overcome the challenges of technology. Current Psychiatry, 19(9). https://doi.org/10.12788/cp.0021

Kamal, S. A., Shafiq, M., & Kakria, P. (2020). Investigating acceptance of telemedicine services through an extended technology acceptance model (TAM). Technology in Society, 60, 101212. https://doi.org/10.1016/j.techsoc.2019.101212

Kim, C. J., Hendriyetty, N., Taghizadeh-Hesary, F., & Evans, C. (2022). Taxation in the Digital Economy. Routledge. https://doi.org/10.4324/9781003196020

Kusumastuti, D., & Musa, H. G. (2023). Enhancing local revenue with land and construction tax incentives: fair and balanced tax approaches. Journal of Law, Environmental and Justice, 1(3), 170–184. https://doi.org/10.62264/jlej.v1i3.11

Lewis, B. D. (2023). Indonesia’s New Fiscal Decentralisation Law: A Critical Assessment. Bulletin of Indonesian Economic Studies, 59(1), 1–28. https://doi.org/10.1080/00074918.2023.2180838

Lui, S., Kuramochi, T., Smit, S., Roelfsema, M., Hsu, A., Weinfurter, A., Chan, S., Hale, T., Fekete, H., Lütkehermöller, K., Jose de Villafranca Casas, M., Nascimento, L., Sterl, S., & Höhne, N. (2021). Correcting course: the emission reduction potential of international cooperative initiatives. Climate Policy, 21(2), 232–250. https://doi.org/10.1080/14693062.2020.1806021

Naidoo, D., Nhamo, L., Lottering, S., Mpandeli, S., Liphadzi, S., Modi, A. T., Trois, C., & Mabhaudhi, T. (2021). Transitional Pathways towards Achieving a Circular Economy in the Water, Energy, and Food Sectors. Sustainability, 13(17), 9978. https://doi.org/10.3390/su13179978

Nandru, P., Chendragiri, M., & S.A., S. (2023). Factors affecting the adoption of mobile payment services during the COVID-19 pandemic: an application of extended UTAUT2 model. Journal of Science and Technology Policy Management. https://doi.org/10.1108/JSTPM-03-2023-0044

Nazarov, M. A., Mikhaleva, O. L., & Chernousova, K. S. (2020). Digital Transformation of Tax Administration (pp. 144–149). https://doi.org/10.1007/978-3-030-27015-5_18

Nurhayati, N., Muda, I., & Kusuma, S. A. (2023). Building Block in Digital Tax Administration: Literature Review. International Journal of Social Service and Research, 3(2), 566–576. https://doi.org/10.46799/ijssr.v3i2.282

Purnama, S. G., & Susanna, D. (2020). Attitude to COVID-19 Prevention With Large-Scale Social Restrictions (PSBB) in Indonesia: Partial Least Squares Structural Equation Modeling. Frontiers in Public Health, 8. https://doi.org/10.3389/fpubh.2020.570394

Rachmawati, R., Choirunnisa, U., Pambagyo, Z. A., Syarafina, Y. A., & Ghiffari, R. A. (2021). Work from Home and the Use of ICT during the COVID-19 Pandemic in Indonesia and Its Impact on Cities in the Future. Sustainability, 13(12), 6760. https://doi.org/10.3390/su13126760

Sandy, N. T., & Inayati, I. (2022). Transfer of Land and Building Taxes in the Plantation and Forestry Sector in Indonesia in a SWOT Analysis Review. Jurnal Public Policy, 8(3), 168. https://doi.org/10.35308/jpp.v8i3.5484

Setyowati, M. S., De Utami, N. sila, Saragih, A. H., & Hendrawan, A. (2020). Blockchain Technology Application for Value-Added Tax Systems. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 156. https://doi.org/10.3390/joitmc6040156

Skipin, D. L., Koltsova, T. A., Yukhtanova, Yu. A., & Ruf, Yu. N. (2020). A person in the Digital Transformation of Tax Administration: Opportunities and Reality. Proceedings of the Russian Conference on Digital Economy and Knowledge Management (RuDEcK 2020). https://doi.org/10.2991/aebmr.k.200730.057

Sparrow, R., Dartanto, T., & Hartwig, R. (2020). Indonesia Under the New Normal: Challenges and the Way Ahead. Bulletin of Indonesian Economic Studies, 56(3), 269–299. https://doi.org/10.1080/00074918.2020.1854079

Sroukh Alderei, H. H., & Sidek, S. (2023). Designing A User-Centred Model to Amplify Satisfaction in Utilizing Online Government Information. International Journal of Sustainable Construction Engineering and Technology, 14(3). https://doi.org/10.30880/ijscet.2023.14.03.019

Uyar, A., Nimer, K., Kuzey, C., Shahbaz, M., & Schneider, F. (2021). Can e-government initiatives alleviate tax evasion? The moderation effect of ICT. Technological Forecasting and Social Change, 166, 120597. https://doi.org/10.1016/j.techfore.2021.120597

Wan Mahari, W. A., Azwar, E., Li, Y., Wang, Y., Peng, W., Ma, N. L., Yang, H., Rinklebe, J., Lam, S. S., & Sonne, C. (2020). Deforestation of rainforests requires active use of UN’s Sustainable Development Goals. Science of The Total Environment, 742, 140681. https://doi.org/10.1016/j.scitotenv.2020.140681