Tax Administration Reform and Equity: Evaluating Indonesia’s Digitalization Strategy

Abstract

Digitalization of tax administration is increasingly promoted as a means to improve efficiency and compliance. This paper evaluates Indonesia’s tax administration digital reforms from an equity and tax justice perspective. Through institutional analysis, the study examines the impact of digital systems on compliance costs, enforcement capacity, and taxpayer inclusion. While digital tools enhance monitoring and efficiency, the findings indicate that unequal digital access may marginalize small and informal taxpayers. This paper contributes to the global literature by highlighting the justice implications of administrative modernization in developing countries. Indonesia’s experience demonstrates that digital reform must be accompanied by inclusive design and taxpayer support to achieve equitable outcomes. The study offers lessons for tax administrations worldwide pursuing digital transformation while safeguarding fairness.