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Tax Education OECD Compliance CRM

4 Pillars of Tax Compliance According to OECD

Arunika Consulting

Based on the theory developed by the Organisation for Economic Co-operation and Development (OECD) since 2004, tax compliance is divided into four main pillars. This theory serves as the foundation for the Directorate General of Taxes (DGT - Direktorat Jenderal Pajak) in developing data analytic products and Compliance Risk Management (CRM).

Here are the four pillars:

1. Registration

This pillar relates to taxpayer compliance in registering themselves or being registered in the tax administration system. Without proper registration, the tax system cannot monitor tax subject obligations.

2. Filing

This pillar is interpreted as taxpayer compliance in reporting their obligations, such as submitting the Surat Pemberitahuan (SPT - Tax Return), in a timely manner (timely filing). Timeliness of reporting is the main indicator in this pillar.

3. Payment

This pillar concerns taxpayer compliance in paying taxes due. Payment compliance is measured by the accuracy of the amount and timing of payment in accordance with statutory regulations.

4. Correct Reporting

This final pillar focuses on complete and accurate reporting of tax information (complete and accurate reporting) in fulfilling tax obligations. This includes reporting turnover, expenses, and tax calculations that correspond to actual facts.

Application in Indonesia

In its application in Indonesia, DGT uses these four pillars as the basis for creating strategic analytic products:

  • Extensification CRM: Used for the Registration pillar.
  • Education CRM & Service CRM: Focused on improving compliance for the Filing pillar.
  • Collection CRM: Used to optimize the Payment pillar.
  • Examination CRM & Transfer Pricing: Used to test the Correct Reporting pillar.