Establishing a State Revenue Authority (Badan Otorita Penerimaan Negara/BOPN) has regained momentum. The proposal was recently reaffirmed by Edi Slamet Irianto, an expert panelist for the Prabowo-Gibran presidential campaign, in early June. According to Edi, BOPN would function as an independent body reporting directly to the president. It was introduced in response to growing demands for greater efficiency, integrity, and innovation in Indonesia’s tax system, which has long struggled with bureaucracy, corruption, and a persistently low tax ratio.
BOPN is envisioned as a more agile institution than the current Directorate General of Taxes (DGT), which operates under the Ministry of Finance. The new authority is expected to professionalize tax administration, improve compliance, and accelerate the transition to a modern, data-driven tax ecosystem.
As an independent entity, BOPN would operate outside the structure of any existing ministry, reporting instead to the president or an independent oversight body. This is intended to insulate it from political pressure and ensure technocratic decision-making in tax policy.
International Comparisons
Many countries have already adopted independent tax authorities with notable success. In the United States, the Internal Revenue Service (IRS) under the Department of the Treasury functions with high operational autonomy. The IRS has authority over policy implementation, collections, and enforcement.
Similarly, Canada’s Revenue Agency (CRA) operates as a semi-independent organization, managing federal and provincial taxes with a structure separate from ministerial control. CRA emphasizes digital service delivery and robust data utilization.
In Singapore, the Inland Revenue Authority of Singapore (IRAS) offers a leading example of efficient, tech-enabled tax governance. IRAS integrates inter-agency data and adopts a voluntary compliance approach, resulting in strong revenue performance.
Proposed Organizational Structure
As envisioned, BOPN would report directly to the president and operate with a streamlined structure to optimize state revenue management. The proposed BOPN’s blueprint would include:
1. Supervisory Board
2. Minister of State/Head of BOPN
3. Deputy for Operations
4. Deputy for ORDAL
5. Expert Staff
6. Internal Inspectorate
7. Principal Secretary
8. Deputy for Planning and Revenue Regulation
9. Deputy for Tax Oversight and Collection
10. Deputy for Non-Tax State Revenue Oversight and Collection
11. Deputy for Customs Oversight
12. Deputy for Legal Enforcement
13. Science and Information Center
14. Human Resources and Training Center
15. Intelligence Division
16. Regional Representative Offices in All Provinces
With this structure, BOPN is expected to foster a more competitive and merit-based environment for tax professionals, moving away from the rigid frameworks of civil service. Incentives and performance evaluations would be based on competence and integrity.
Indonesia’s tax ratio remains among the lowest in the G20, and a more independent revenue authority is viewed as central to improving collection efficiency and expanding the tax base sustainably.
Moreover, as a newly established body, BOPN would have the opportunity to build digital-native infrastructure from the ground up. This could include using AI, big data, and blockchain technologies to strengthen compliance, monitor transactions, and enhance real-time taxpayer services.
Challenges Ahead
Despite its promise, the establishment of BOPN could result in a potential overlap of responsibilities with the Ministry of Finance, particularly in budget planning, fiscal policy, and data integration. These concerns would need to be addressed through clear legal frameworks.
Institutional resistance, especially from within the DGT, is another concern. Existing personnel may fear losing their positions or career progression paths. Additionally, political interests could obstruct the formation of a truly independent autonomous authority.
The financial cost of launching a new institution is also considerable. Infrastructure, staffing, training, and IT systems require substantial upfront investment, which places pressure on public finances if not carefully managed.
A Path Forward
To minimize disruption, the transition to BOPN could be implemented in phases. One option would be to start with a semi-autonomous unit within the DGT, gradually evolving into a fully independent entity under a legal mandate.
Ultimately, creating BOPN would represent a big leap toward a transparent, modern, and responsive tax administration. While challenges remain, an independent revenue authority could significantly enhance state revenue management and rebuild public trust in the tax system. Success will depend on sound institutional design, accountability, and a solid legal foundation.
That is an overview of BOPN. If you need professional assistance with tax matters, Ideatax is here to help.
