Indonesia, with tax revenue accounting for 65.37% of total government revenues, grapples with a low tax ratio. According to the Organisation for Economic Co-operation and Development (OECD), in 2023, Indonesia’s tax ratio only reached 10.21% of GDP. This places Indonesia’s tax ratio among the lowest in the Asia-Pacific region, far below the average tax ratio of 19.1% for Asia-Pacific countries and 33.5% for OECD countries.
Boosting tax compliance has become a pressing issue for the Indonesian Government. While traditional methods such as monitoring and enforcement are commonly employed, limited resources and capacity within the tax authority sometimes hinder these efforts. In response, a new strategy has emerged.
In 2014, the Indonesian Directorate General of Taxes (DGT) launched the Tax Awareness Inclusion Program, a tax education initiative aimed at enhancing tax knowledge and fostering positive attitudes toward taxation. The program seeks to instill intrinsic motivation to pay taxes as a cost-effective and sustainable means to increase tax compliance. According to the tax education roadmap, by 2060, Indonesian citizens are expected to possess a high level of tax awareness, contributing to optimal welfare for all. The Tax Awareness Inclusion Program comprises three pillars: cooperation and policy, education, and campaign.
The Pajak Bertutur (Patur) program
At the forefront of the Indonesian Tax Awareness Inclusion Program is the Pajak Bertutur (Patur) program, which is part of the tax education campaign. “Patur” itself means “tax conveys” or “tax speaks.” This annual program comprises comprehensive one-day events held at formal educational institutions.
During the Patur events, tax officials visit schools (elementary schools, middle schools, high schools, and universities) in their regions to introduce tax-related materials to students. The focus of the Patur program is on raising awareness and fostering positive perceptions of taxation among students as the young generation and future taxpayers.
While there are no specific provisions regarding teaching materials and delivery methods for the Patur program, the DGT central office has identified tax-related values or themes to be taught at each level of education. These themes serve as the foundation for creating teaching materials. For example, high school students are introduced to the concept that “taxes are the backbone of the country.” Thus, the materials for high school students not only cover an introduction to taxes in Indonesia but also explain the role of taxes in the state budget and national development.
To engage students effectively, various methods such as active lecturing, video presentations, and educational games are utilised. The materials and delivery methods are tailored to the educational level of students to ensure better understanding.
Challenges and innovation
The necessity for a dedicated tax education program arises from the current condition where tax education is not a standalone subject within the Indonesian school curriculum. Instead, taxation is sporadically addressed in economics and civic education classes. Consequently, the Patur program serves as more of an extracurricular activity, facilitating students’ tax awareness and understanding of tax responsibility as a shared social duty.
Given its purpose, the technical aspects of Patur implementation are crucial. Tax offices act as the “executors” of the program, liaising with schools and designing appropriate strategies. While the DGT central office provides broad guidelines, tax offices have considerable flexibility to tailor program implementation to suit the diverse characteristics of schools and students.
However, Indonesia’s vast size and diverse cultural landscape present challenges. Variations in school infrastructure and regional differences necessitate an adaptive approach to designing and delivering tax education. Factors such as student engagement, instructors’ experience, and infrastructure availability must be considered, alongside the design of innovative and adaptable delivery methods suitable for students. Moreover, to ensure relevance and comprehension, local socio-economic contexts and language play crucial roles in shaping the effectiveness of both the method and content of tax education.
Innovation from the tax offices is thus important in implementing the Patur program. Tax offices need to develop methods and, maybe, additional materials to deliver tax education. This creativity is essential to keep students engaged throughout the events. Examples of some initiatives undertaken by tax offices are:
- Adding more illustrations or examples related to the materials to enhance understanding.
- Incorporating local knowledge relevant to the region where the school is located.
- Tailoring materials slightly for students in vocational high schools, considering their different post-graduation plans.
- Translating materials into the local language for better understanding.
These initiatives empower tax office officials to enhance the program’s relevance and effectiveness across diverse educational settings. However, this adaptability demands that tax offices possess the necessary expertise to develop and deliver educational content effectively. While tax officials may lack formal pedagogical training, teachers, who are typically well-versed in such methods, may struggle to impart taxation knowledge effectively. Therefore, forging a strategic partnership between educators and tax officials to design and implement the tax education program in Indonesia could pave the way for future success in raising tax awareness for future generation of taxpayers in Indonesia.
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