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Indonesia’s tax system is about to undergo a quiet revolution, and women are at the center of it.
On January 1, 2025, Indonesia’s Directorate General of Taxes (DJP) will fully roll out its Coretax system, replacing the need for traditional tax ID numbers (NPWP) with the National Identity Number (NIK). Beyond streamlining compliance, this reform profoundly alters how married women, working professionals, and female executives interact with the state’s tax machinery.
Indonesia’s Tax System: Competitive Edge or Compliance Maze?
Why It Matters
Historically, Indonesia treated families as single economic units. Married women’s income was bundled with their husband’s, limiting their fiscal independence. Default rules discouraged married women from maintaining their own NPWP, inadvertently reinforcing traditional gender roles within tax administration.
But what happens when more women earn, lead companies, and manage their financial lives?
The data signals a shift: women contributed 37.17% of national income in 2022, with steady growth expected. Meanwhile, female representation in management has climbed to 35% in 2023, according to the national statistics agency (BPS).
Coretax isn’t just a software upgrade. It’s a structural correction to an outdated administrative model.
The Crossroads of Identity and Tax Compliance
Under the old regime, a married woman’s income tax (PPh Article 21) faced bureaucratic entanglements. HR departments struggled: a woman might be hired under her name but taxed under her husband’s NPWP. Financial systems had to toggle between two identities, creating friction and occasional compliance risks.
Coretax changes the game. Now, employees’ NIKs are a single, universal identifier that anchors payroll and taxation records, with no more ambiguous alignments between personal and financial identities.
This is more than administrative ease; it acknowledges married women as independent economic agents, no longer requiring their husband’s tax ID to legitimize their income.
Women Leading Companies: The New Norm
Another powerful shift? Coretax mandates that a company’s tax representative, authorized to sign invoices and manage tax affairs, must first access the corporate system via their personal Coretax account.
With more women in managerial roles, this matters.
Yet there’s a twist: many married female executives have chosen to consolidate their taxes under their husband’s NPWP, making them technically “invisible” in the old tax infrastructure. Coretax’s “Register Only” feature solves this dilemma. Married women can register their NIK to create a Coretax access account without establishing a separate NPWP, balancing compliance with personal choice.
It’s a clever compromise: practical for corporate governance and respectful of family tax structures.
Risks, Challenges, and Unintended Consequences
Of course, modernization invites risk.
- Data Privacy: Linking tax obligations to a single national ID could raise cybersecurity concerns.
- Gender Bias Persistence: Tools may change, but societal expectations lag. Women might still face subtle pressure to defer financial responsibilities.
- Compliance Gaps: Companies must educate HR and finance departments quickly to ensure seamless adoption or risk technical non-compliance.
Indonesia is not alone here. Cross-border comparisons show similar moves: Estonia and Singapore successfully tied tax systems to national IDs years ago, achieving both efficiency and stronger taxpayer engagement. Others, like India’s Aadhaar-PAN linkage, encountered privacy backlash.
Indonesia’s Coretax journey will likely face a similar push-pull between innovation and caution.
Strategic Advice for Companies and Regulators
- Educate Early: HR and finance teams must understand new Coretax protocols, particularly how to onboard female executives properly.
- Safeguard Data: Invest in cybersecurity measures to protect NIK-linked records.
- Monitor Gender Impact: Regulators should track whether reforms boost married women’s financial autonomy.
- Facilitate Voluntary Transitions: Provide user-friendly guidance for “Register Only” users to avoid confusion at onboarding.
Tax systems mirror societies. As Indonesia modernizes its fiscal identity frameworks, it must ensure that gender equality isn’t just a feature but a foundation.
Read More: Indonesian Tax Update: Waiver for Penalties on Individual Taxpayers and New Customs Regulations
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