The study, titled Finding a Way Out: Overcoming the Administrative Maze in National Tax Services, was published in the Indonesian Journal of Accounting and Financial Technology (CRYPTO) by researchers Keyzia Azzura Dafid, Arla Fitria, Ahmad Fauzan Putra Ardi, Mega Metalia, and Ratna Septiyanti from the University of Lampung.
The researchers examined how administrative inefficiencies continue to obstruct tax services in Indonesia despite ongoing digital reforms. Their findings highlight the urgent need for simpler regulations, integrated digital systems, and more citizen-friendly public services in the taxation sector.
Tax Complexity Still Burdens Citizens and Businesses
Tax revenue remains one of the most important pillars of Indonesia’s state income. However, the study found that taxpayers are frequently trapped in what the authors describe as an “administrative labyrinth” a system filled with repetitive procedures, regulatory overlaps, and inefficient verification processes.
According to the researchers, this complexity affects not only large corporations but also ordinary citizens and small businesses. Many taxpayers still face lengthy paperwork requirements and inconsistent administrative procedures across different government institutions.
The study identifies several major causes behind the problem:
- Frequent revisions of tax regulations that create uncertainty
- Lack of integration between government databases
- Manual verification processes at tax offices
- Bureaucratic hierarchies that slow decision-making
- Uneven digital infrastructure across regions
The researchers noted that taxpayers often need to submit the same documents repeatedly because government agencies do not fully share data systems. This redundancy increases administrative costs and wastes time for businesses and individuals alike.
“Administrative complexity damages the relationship between the state and society,” the researchers from the University of Lampung wrote, emphasizing that public trust is directly linked to the quality of tax services.
Compliance Costs Extend Beyond Financial Burdens
One of the study’s central findings concerns the rising compliance cost faced by taxpayers. The term refers to all expenses incurred in meeting tax obligations beyond the actual amount of tax paid.
The researchers explain that compliance costs include:
- Hiring tax consultants or administrative staff
- Spending time preparing tax reports and documentation
- Adapting to constantly changing regulations
- Psychological stress caused by fear of penalties or errors
The study argues that Indonesia’s complex tax system creates what the authors call “bureaucratic fatigue.” Many taxpayers become overwhelmed by procedures rather than by the tax burden itself.
Small and medium-sized enterprises (SMEs) are particularly vulnerable. Because smaller businesses lack the resources of large corporations, they often bear disproportionately higher administrative costs.
The research also highlights the psychological impact of complicated tax systems. Unclear procedures and inconsistent services can increase taxpayer anxiety and reduce voluntary compliance.
According to the paper, taxpayers are more likely to avoid or delay compliance when they perceive the system as hostile or excessively difficult to navigate.
CTAS Emerges as a Key Reform Strategy
The study places significant attention on Indonesia’s Core Tax Administration System (CTAS), a large-scale digital reform initiative designed to modernize tax administration.
CTAS is intended to integrate tax services into a single digital platform capable of automating processes that were previously handled manually.
The researchers identified several expected advantages of CTAS:
- Automated data validation and verification
- Reduced face-to-face bureaucracy
- Faster tax registration and reporting services
- Real-time monitoring of tax applications
- Improved transparency and accountability
- Elimination of duplicate data submissions
A major feature of the reform is the creation of a “single source of truth” database, allowing taxpayers to avoid repeatedly entering the same information across different services.
The study also points to Indonesia’s integration of National Identification Numbers (NIK) with Taxpayer Identification Numbers (NPWP) as an important step toward simplifying identity administration.
Another proposed solution is the use of pre-populated tax returns, where tax forms are automatically filled using verified third-party data. The researchers believe this system could significantly reduce reporting errors and administrative workloads.
However, the authors stress that digitalization alone is not enough.
“Technology should not merely transfer manual complexity into digital form,” the researchers stated. “Digital reform must be accompanied by regulatory simplification.”
Public Trust Seen as the Foundation of Tax Compliance
Beyond technical reforms, the study argues that improving tax administration is fundamentally about rebuilding public trust.
The researchers referenced the principle of ease of administration introduced by Adam Smith in The Wealth of Nations. The principle states that taxes should be collected in the most convenient way possible for citizens.
In the modern context, the researchers interpret this principle as the need for:
- Clear and accessible tax procedures
- Transparent public services
- Simplified reporting systems
- Inclusive digital platforms
- Consistent communication across tax offices
The study also discusses the growing role of big data and artificial intelligence in modern tax administration. Integrated digital systems can help governments detect irregularities more accurately while reducing unnecessary administrative burdens for compliant taxpayers.
Still, the authors caution that digital transformation requires strong infrastructure and public digital literacy. Without proper implementation, digital systems may simply create new forms of complexity.
Research Method and Academic Context
The research used a qualitative conceptual approach based on a systematic literature review. The authors analyzed peer-reviewed academic sources indexed in platforms such as Scopus, Sinta, and Google Scholar.
Using thematic synthesis methods, the researchers examined patterns related to tax administration, compliance costs, bureaucracy, and digital transformation in public services.
The study draws upon theories of bureaucratic pathology, compliance costs, public trust, and digital governance to explain how inefficient administration can undermine economic performance and taxpayer morale.
Author Profiles
Keyzia Azzura Dafid researcher in taxation and public administration at University of Lampung
Arla Fitria academic researcher specializing in public service administration at University of Lampung
Ahmad Fauzan Putra Ardi researcher in taxation policy and governance at University of Lampung
Mega Metalia scholar focusing on administrative reform and public management at University of Lampung
Ratna Septiyanti researcher in bureaucracy and public policy at University of Lampung
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