Effectiveness of Implementing Single Identity Number (SIN) Through NIK Becomes NPWP for Tax Compliance

Abstract

The inadequate and ineffective tax administration system in Indonesia has a negative impact on taxpayer compliance in carrying out their tax obligations, such as the tax reporting process is often complicated and time-consuming, thus burdening taxpayers, especially those who run small or medium businesses. The implementation of the Single Identity Number (SIN) through the Population Identification Number (NIK) to the Taxpayer Identification Number (NPWP) in Indonesia starting on January 1, 2024, is a major step in efforts to improve tax compliance. This study was conducted to evaluate the impact of the implementation of SIN through NIK to NPWP on tax compliance as tax administration in Indonesia. This study uses a literature study approach which is a combination of previous research by collecting data from various sources such as scientific journals, news articles, and government regulations which will then find enormous potential in expanding the tax base in increasing taxpayer compliance to carry out tax obligations through the SIN system. The results obtained from this study indicate that the implementation of SIN through NIK to NPWP has a positive impact on increasing tax compliance in Indonesia, such as more effective and easier tax administration with the simplification of tax administration and increased tax revenue. However, despite having various positive impacts, there are several challenges that need to be considered to maximize the effectiveness of the integration, such as the need for socialization and education to the community throughout Indonesia, the need for readiness in terms of information technology infrastructure to support the integration in a sustainable manner, and the need for certainty of good protection of taxpayers' personal data. So, it can be concluded that implementing the integration of NIK and NPWP through the SIN system can have impressive results in improving tax compliance in Indonesia.