The Role of Technology in Improving Tax Compliance: A Case Study of E-Filing in Indonesia

Abstract

This study examines the role of technology, specifically e-filing, in improving tax compliance in Indonesia. The rapid digitalization of tax systems has the potential to enhance administrative efficiency, reduce errors, and increase taxpayer compliance. However, challenges such as digital literacy, internet accessibility, and security concerns hinder the full adoption of e-filing, particularly among taxpayers in rural and underserved areas. The primary objective of this research is to assess how e-filing influences tax compliance behaviors and identify the factors that affect its successful implementation. Using a qualitative case study approach, data were collected through semi-structured interviews, focus group discussions, and document analysis, involving tax professionals, government officials, and taxpayers. The study finds that while e-filing has streamlined the tax filing process and improved the accuracy of tax returns, its impact on overall compliance remains inconsistent. Taxpayers with prior digital experience reported higher satisfaction and greater trust in the system, whereas those with limited digital literacy faced significant barriers. The research also highlights the importance of education, infrastructure, and security measures in fostering wider acceptance of e-filing. The findings contribute to the understanding of how technology can enhance tax compliance in developing countries and offer practical recommendations for policymakers to address existing barriers. Future research should focus on improving digital literacy and exploring the long-term effects of e-filing on taxpayer behavior.