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FORMOSA NEWS - Manado - Corporate Tax Compliance in Tahuna Remains Low as Income Tax Revenue Continues to Rise. These findings were revealed in research conducted by Michelle Felycia Stephanie Bawole, Sonny Pangerapan, and Christian Datu from Sam Ratulangi University, in a scientific article published in 2026 in the Formosa Journal of Applied Sciences. 

The study examines corporate taxpayer compliance in submitting Annual Corporate Income Tax Returns (SPT Tahunan PPh Badan) at KPP Pratama Tahuna, a local tax office serving the island regions of Sangihe, Siau Tagulandang Biaro (Sitaro), and Talaud in North Sulawesi. The findings are particularly relevant as taxes remain Indonesia’s main source of state revenue, contributing nearly 68 percent of total national income in the 2024 State Budget.

Why Corporate Tax Compliance Matters

Tax revenue remains the backbone of Indonesia’s state budget. In the 2024 State Budget (APBN), taxation contributed nearly 68 percent of total state revenue. However, corporate income tax has shown volatility, with national contractions reported in recent years.

Indonesia applies a self-assessment system, meaning companies are responsible for calculating, paying, and reporting their own taxes. This system relies heavily on voluntary compliance. When companies fail to submit accurate and timely annual tax returns, government revenue and fiscal planning can be affected.

KPP Pratama Tahuna oversees corporate taxpayers across the Sangihe Islands, Siau Tagulandang Biaro (Sitaro), and Talaud regencies-an archipelagic region with geographic and logistical challenges. Despite an increasing number of registered corporate taxpayers, formal reporting compliance remains below expectations.

How the Study Was Conducted

The researchers used a qualitative descriptive approach, combining:

• Official data from KPP Pratama Tahuna (2022–2024).
• Interviews with Account Representatives and service officers.
• Analysis of compliance ratios and revenue effectiveness.

Key Findings: Compliance Remains Low

Corporate Tax Reporting Compliance (2022–2024)

• 2022: 54.78% – Low
• 2023: 56.64% – Low to Moderate
• 2024: 51.74% – Low

Although 2023 showed slight improvement, compliance dropped again in 2024. All three years fall below the Directorate General of Taxes’ ideal compliance standards.

In 2023, only 827 out of 1,460 active corporate taxpayers submitted annual returns. In 2024, just 831 out of 1,606 active taxpayers reported.

According to the researchers, this indicates that more than half of active companies in the region either delay or fail to submit annual corporate income tax returns.

Corporate Income Tax Revenue Continued to Rise

Despite low reporting compliance, corporate income tax revenue increased each year:

• 2022: Rp3.26 billion.
• 2023: Rp3.51 billion.
• 2024: Rp4.22 billion.

Revenue grew significantly in 2024, with an increase of Rp717 million compared to 2023.

However, when compared to annual targets, effectiveness declined:

• 2022: 145.82% of target – Very Effective
• 2023: 85.71% – Moderately Effective
• 2024: 69.73% – Less Effective

The decline in effectiveness occurred because targets increased sharply while compliance and realization did not keep pace.

Policy Implications and Practical Solutions

The researchers recommend several policy actions:

• Establish mobile tax service points (Pojok Pajak) in remote island areas.
• Strengthen digital tax education and literacy programs.
• Improve online reporting infrastructure and system reliability.
• Set more realistic annual revenue and compliance targets aligned with local conditions.

Mobile tax service units could provide on-site assistance for annual reporting, particularly in archipelagic regions where transportation barriers limit access.

For policymakers, the study underscores that improving compliance requires both education and structural support. For businesses, it reinforces the importance of timely and accurate reporting under Indonesia’s self-assessment system.

Author Profile

Michelle Felycia Stephanie Bawole, S.E. is a researcher in taxation and accounting at the Faculty of Economics and Business, Sam Ratulangi University, Manado.

Dr. Sonny Pangerapan, S.E., M.Si. is a senior lecturer in taxation and public finance at Sam Ratulangi University,

Specializing in fiscal policy and tax administration.

Christian Datu, S.E., M.Si. is a lecturer and researcher in accounting and taxation at Sam Ratulangi University,

With expertise in tax compliance and public sector finance.

Sources

Bawole, M. F. S., Pangerapan, S., & Datu,. Analysis of Corporate Taxpayer Compliance with Tax Return Submission for Increasing Corporate Income Tax Revenue at the Annual Tax Office. Formosa Journal of Applied Sciences (FJAS), Vol. 5 No. 1, hlm  307–326. 2026
DOI: https://doi.org/10.55927/fjas.v5i1.568
URL: https://srhformosapublisher.org/index.php/fjas