Strengthening State Revenue: From Internal Sanctions to Artificial Intelligence Weaponry

The Indonesian Government's efforts to maintain integrity and optimize state revenue through the taxation sector are intensifying. Strategic steps are being taken, ranging from enforcing discipline against internal personnel to adopting cutting-edge technology to expand the previously hidden tax base.

In the latest spotlight, Finance Minister Purbaya Yudhi Sadewa revealed a serious case concerning the practice of embezzlement of tax deposits by several government treasurers in various regions. This case emerged thanks to public reports, which proved that tax deductions were not deposited, or were even misused, by authorized officials. The Directorate General of Taxes (DJP) took firm action, submitting one case in Bangkalan Regency to the prosecutor's office for criminal prosecution. This case confirms that the Government is serious about tightening internal supervision to ensure that every tax fund deducted by a third party genuinely enters the state treasury, a crucial step to maintain the trust of the public and business players.

On the regulatory side, the Constitutional Court (MK) affirmed legal certainty in the Income Tax (PPh) scheme. The MK rejected the material judicial review petition against the PPh Law, effectively ensuring that severance pay and employee pensions remain subject to PPh. This decision provides clarity for companies to ensure that the PPh Article 21 deduction on end-of-service compensation complies with regulations. Individual taxpayers also need to note that the pension funds they receive constitute a legitimate component of taxable income.

Furthermore, the DJP is also showing significant progress in its modern surveillance strategy. The tax authority is now utilizing Artificial Intelligence (AI) to hunt for potential tax revenue from the shadow economy that has previously been difficult to reach. The use of this AI technology has proven to be efficient. In a conducted trial, the AI detection system successfully uncovered hidden tax potential worth up to Rp 20 trillion ($inline$ \text{approx. } $1.28 \text{ billion}) from the crude palm oil (CPO) sector in North Sumatra.

Overall, this dynamic conveys a clear message: the Government is tightening regulations through disciplinary enforcement and ensuring legal certainty. At the same time, the adoption of advanced technology such as AI increases the DJP's capability to broaden the taxation net. Business players need to comprehensively increase their compliance, as the Government's surveillance system is now far more accurate and integrated to create a taxation system that is fair and optimal for national economic development.