Strengthening Tax Administration Through Bureaucratic Reform: Toward The Optimization Of The Tax Ratio In Indonesia (A Case Study Of The Directorate General Of Taxes)

Abstract

This study aims to evaluate the effectiveness of bureaucratic reform in enhancing the performance of tax institutions and optimizing the tax ratio in Indonesia, with a specific focus on the Directorate General of Taxes (DGT). The research is motivated by Indonesia’s relatively low tax ratio compared to other ASEAN and OECD countries, despite various reform initiatives undertaken by the government, including digitalization and institutional restructuring. Employing a qualitative approach with a case study design, the research utilizes data triangulation techniques through in-depth interviews, participatory observation, and document analysis.
The findings reveal that technology-driven reforms have improved administrative efficiency in line with the New Public Management (NPM) framework; however, they have not significantly boosted taxpayer compliance. The lack of inter-agency coordination among fiscal authorities and internal resistance within the institution present major barriers to implementing principles of collaborative governance. On the other hand, the proposed establishment of the National Revenue Agency (NRA) is considered a strategic move in addressing the need for comprehensive institutional reform. The study also identifies a persistent policy gap between reform design at the central level and implementation at the operational level.The novelty of this study lies in the development of a hybrid institutional reform model that adaptively integrates both top-down and bottom-up approaches. These findings provide strategic implications for advancing sustainable tax reform in Indonesia.