Sri Mulyani Hopes the Use of NIK for TIN can be Effective

Finance Minister Sri Mulyani said the Draft Law (RUU) on the Harmonization of Tax Regulations (RUU HPP) was under discussion. One of the points regulated in this bill is the transformation of NIK as a Taxpayer Identification Number (NPWP) for individual taxpayers. Sri Mulyani hopes that the transformation of NIK into NPWP can make tax management effective.

“Don’t let there be turmoil in the transition period, both from the technical side and from the organizational side,” Sri Mulyani explained in the “Inauguration of Officials in the Ministry of Finance” on Monday (4/10/2021).

Minister of Finance Sri Mulyani.  (Photo: Screenshot/Sasmito Madrim/Mouab)

Minister of Finance Sri Mulyani. (Photo: Screenshot/Sasmito Madrim/Mouab)

Sri Mulyani also asked the Directorate General of Taxes (DGT) of the Ministry of Finance to create applications and reliable data in order to increase the tax ratio.

The tax ratio is a comparison or percentage of tax revenue to gross domestic product (GDP) which can be used as an indicator to assess the performance of tax revenues.

Indonesia Doesn’t Have a Taxpayer Profile Database

Tax Observer Danny Darussalam Tax Center (DDTC) Darussalam said that one of the problems with the tax system in Indonesia is that it does not have a strong taxpayer profile database. Whereas the data is needed to map and test taxpayer compliance.

Therefore, he hopes that the use of NIK as NPWP can improve tax compliance of individuals who are not yet optimal. He cited data from the Ministry of Finance, the government only has 45.4 million taxpayers who have a NPWP or about 34.6 percent of the workforce in Indonesia.

“That is, the rest is outside the radar of the authorities. With the integration of the KTP or NIK and NPWP, of course there will be more data that can be mapped and monitored for compliance by the Director General of Taxes,” Darussalam explained to Mouab, Monday (4/10/2021).

Darussalam added that this policy can also make economic activities that use an ID card/NIK can be traced by the Director General of Taxes, even though the person is not yet a taxpayer.

“This integration is arguably a breakthrough towards a single identity number that has been carried out in many developed countries in improving tax compliance of all parties in Indonesia,” he added.

Menuju Single Identity Number

The government is heading towards implementing a Single Identity Number (SIN) or a unique identity number for each citizen that is used for all affairs. Such as ID cards, driving licenses, passports, and NPWP. A number of regulations have been prepared for the implementation of SIN. One of them is the Bill on the Harmonization of Tax Regulations (RUU HPP) which was agreed by the government and the DPR last week.

Executive Director of ELSAM, Wahyudi Djafar.  (Photo: ELSAM)

Executive Director of ELSAM, Wahyudi Djafar. (Photo: ELSAM)

Previously, President Joko Widodo had also signed Presidential Regulation Number 83 of 2021 concerning the Inclusion and Utilization of NIK and or Taxpayer Identification Numbers in Public Services. This rule requires NIK and/or NPWP for citizens who want to access public services.

However, this regulation received criticism from the Institute for Community Studies and Advocacy (ELSAM). ELSAM Executive Director Wahyudi Djafar said the use of NIK for public services is vulnerable to discriminating against citizens from public facilities. The reason is that not all Indonesian citizens already have an ID card in which there is a NIK. An example of the problem is the vaccination program that has not touched residents without a NIK, such as persons with disabilities, indigenous peoples and migrant workers with problems.

In addition, the prerequisites for NIK in accessing public facilities increasingly make NIK a very important data. However, on the other hand, the protection of personal data in Indonesia is still not optimal. [sm/em]

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