JAKARTA (Reuters) – A tax system upgrade in Indonesia has had a problematic launch this month with the tax office apologising after users, including foreign businesses, complained of disruption, glitches and outages that affected their operations.
When President Prabowo Subianto launched the 1.2 trillion rupiah ($74 million) “core tax” system on Jan. 1, he said it was a new era for a more efficient and effective tax administration.
However, many users have experienced problems such as system crashes and other operating issues. The Indonesian Employers Association (Apindo) said members had complained of data mismatches that prevented them from issuing important tax documents needed for transactions.
“This needs to be a serious concern because it has a direct impact on business processes, such as tax reporting, document submission, and a timely calculation of tax obligations,” Apindo chairwoman Shinta Kamdani told Reuters.
The tax office apologised for the launch problems in a statement on Friday, and said the system’s capacity would be increased to handle more users.
On Monday, it said it had fixed some issues, including for logging into the system and the management of tax documents.
The new system was developed by a consortium of South Korean firm LG CNS and Qualysoft Group, and is intended to use data gained during tax amnesty in 2016 and 2017 to improve taxpayer profiles and compliance oversight. The companies had not responded to a request for comment by publication time.
A senior staff member at an international accounting firm, speaking on condition of anonymity, told Reuters that about half the firms’ clients had been unable to log in to the tax system after the upgrade, though the issue was starting to be resolved.
While waiting for a consultation at a tax office in Jakarta, an employee with a Malaysian manufacturing company told Reuters they had to continuously seek advice on tax documents because of various problems in the new system.
Prabowo has pledged to boost tax revenue to 18% of GDP from around 10% currently to fund his election promises, including giving free lunches to school children and pregnant women.
($1 = 16,270 rupiah)
(Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and John Mair)
