The Law and Practice of Tax Audits in Indonesia - The Obstacles to Tax Compliance in a Developing Country

This research considers links between Indonesia’s tax collection performance, and the design and operation of its tax compliance system. In particular, the research considers how Indonesia’s tax authority (the DGT) undertakes tax audit activity in practice, and also considers past recommendations made by the OECD, World Bank and IMF, to improve tax collection efficiency, many of which have not yet been adopted by the Indonesian Government. The research also addresses aspects of tax compliance theory, and the potential distortionary effect of Indonesia’s tax compliance approach when viewed in that theoretical context.