PLAGIARISM SCAN REPORT

Date May 07, 2024

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3. Optimizing Tax Revenue

Optimizing tax revenue is the primary goal of implementing strategic management and utilizing the Tax Gap

dashboard by the Directorate General of Taxes (DGT). By leveraging a strategic management approach,

DGT can identify untapped tax potentials and design strategic measures to enhance overall tax revenue

(Hadipryanto et al., 2023).

Using the Tax Gap dashboard, DGT can efficiently gather and analyze data to identify areas where tax

potentials have not been fully optimized. This dashboard assists DGT in conducting in-depth analysis of

various factors influencing tax revenue, such as taxpayer compliance, undisclosed tax potentials, and tax

risks. By combining information obtained through strategic management and the Tax Gap dashboard, DGT

can formulate more effective strategies to increase tax revenue. This includes utilizing appropriate tax

incentives, enhancing supervision of taxpayers potentially engaged in violations, and providing better services

to tax-compliant entities. Thus, optimizing tax revenue is the expected outcome of integrating strategic

management and the utilization of the Tax Gap dashboard by DGT. These steps not only help increase state

revenue but also support the sustainability of national economic development (Irawan, 2019).

State revenue optimization is crucial in managing national finances as a pillar of the State Budget (APBN).

State revenue contribution is a key aspect in maintaining financial stability and ensuring the fulfillment of

government budget needs (Jing et al., 2023). The contribution of tax revenue to the APBN can be seen in the

following Table 2:
Table 2: Realization of State Budget 2022-2023

DESCRIPTION 2022 2023

Realization (Trillion) APBN (Trillion) Perpres 75/2023 (Trillion) Realization (Trillion) % of APBN % of Perpres

75/2023 Growth (%)

A. STATE REVENUE 2.635,8 2.463,0 2.637,2 2.774,3 112,6 105,2 5,3

I. DOMESTIC REVENUE 2.630,1 2.462,6 2.634,1 2. 761,3 112,1 104,8 5,0

Tax Revenue 2.034,6 2.021,2 2.118,3 5.155,4 106,6 101,7 5,9

Non-Tax State Revenue (PNBP) 595,6 441,4 515,8 605,9 137,3 117,5 1,7

II. GRANTS RECEIVED 5,7 0,4 3,1 13,0 3.172,4 419,0 128,0

B. STATE EXPENDITURE 3.096,3 3.061,2 3.117,2 3.121,9 102,0 100,2 0,8

I. CENTRAL GOVERNMENT EXPENSES 2.280,0 2.246,5 2.302,5 2.240,6 99,7 97,3 (1,7)

Ministry/Agency Expenditure 1.084,7 1.000,8 1.000,8 1.153,5 115,2 115,2 6,3

Non-Ministry/Agency Expenditure 1.195,4 1.245,6 1.301,6 1.087,2 87,3 83,5 (9,0)

II. TRANSFERS TO REGIONS 816,2 814,7 814,7 881,3 108,2 108,2 8,0

C. PRIMARY BALANCE (74,1) (156,8) (38,5) 92,2 (58,8) (239,4) (224,5)

D. SURPLUS/(DEFICIT) (460,4) (598,2) (479,9) (347,6) 58,1 72,4 (24,5)

% of GDP (2,35) (2,84) (2,27) (1,65)

E. BUDGET FINANCING 591,0 598,2 479,9 395,5 60,1 74,9 (39,2)

Budget Surplus/(Deficit) 130,6 11,9

Source: Annual Report of the Ministry of Finance 2023

Table 2 provides a clear overview of the performance of state revenue and expenditure in 2023. The

realization of state revenue in that year reached 112.6% of the 2023 APBN target and 105.2% of the previous

year's realization. Meanwhile, state expenditure reached 102.0% of the APBN target and 100. There was also

an improvement in the surplus/deficit, which in 2023 amounted to (347.6) trillion Rupiah, better than the

previous year. In the context of state revenue, the realization of revenue in 2023 shows positive performance,

especially in tax revenue and Non-Tax State Revenue (PNBP). Although data on tax realization by type is not

available in the table, this achievement reflects the effectiveness of the efforts by the Directorate General of

Taxes (DGT) to improve taxpayer compliance and optimize overall tax revenue (Herawaty, 2021).

Optimizing tax revenue is crucial in the context of state financial management. Taxes are the main source of

revenue for the government to finance various programs and projects needed for development and public

services. In the context of the State Budget (APBN), taxes are a key pillar in supporting the sustainability of

state finances. When tax revenue is successfully optimized, it has a significant impact on fiscal stability and
economic growth of a country. Well-collected taxes can be used to finance infrastructure, public services,

education, health, and various other social programs that can improve the overall welfare of society. With the

optimization of tax revenue, the government can ensure the sustainability of development and public services

and reduce reliance on foreign debt or other unstable sources of revenue. Furthermore, increasing tax

revenue also reflects better compliance from taxpayers with their tax obligations, which in turn can create

social justice and sustainability in the tax system (Jing et al., 2023).

In the context of the State Budget, tax revenue is one of the main factors affecting the balance between state

income and expenditure. By optimizing tax revenue, the government can ensure that revenue sources are

sufficient to finance various programs and activities planned in the State Budget without relying on excessive

budget deficits or significant cuts in state spending. Therefore, the conclusion is that optimizing tax revenue is

crucial for the financial sustainability of the state and the achievement of broader national development goals.

By improving efficiency and effectiveness in managing tax revenue, the government can ensure that the

budget is used optimally to improve the welfare of society and advance the nation (Harymawan et al., 2021).

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