Assessing Indonesia’s Directorate General of Taxes’ Performance During Coretax Implementation: A Value for Money Approach

Abstract

Tax administration reform through digital transformation has become important for improving resource management and revenue performance in Indonesia. Although Coretax was introduced to modernize tax administration, evidence evaluating its performance through an integrated Value for Money (VFM) framework remains limited. This study evaluates the Directorate General of Taxes' (DJP) performance during 2023–2025. This study used a descriptive quantitative approach and secondary data from DJP financial and annual reports. The study measured economy as expenditure realization relative to expenditure targets, efficiency as expenditure realization relative to revenue realization, and effectiveness as revenue realization relative to revenue targets. In 2025, the economy ratio was 72.50% (95.36% when excluding the blocked budget), which refers to economic efficiency. The efficiency ratio was 0.27%, showing an efficient cost structure. The effectiveness ratio was 87.60% (considered not effective).  This remains a fall from 100.50% (effective) in 2024 due to a higher revenue target and higher tax refunds, even though gross tax revenue reached 104.10% of the target. This result implies that VFM dimensions of DJP tax revenue during the Coretax transition excelled in economy and efficiency but ultimately diminished in effectiveness. The findings provide an initial baseline for evaluating digital tax administration reform.