The Recent Development of Tax Accounting in Indonesia

This study has two objectives. The first aim is to reveal the development of tax accounting thoughts in Indonesia before and after the 2012 convergence of International Financial Reporting Standards (IFRS). The other objective is to provide options to tax policymakers to solve the book-tax difference because of IFRS convergence. This study is qualitative research adopting Foucauldian
archaeology of knowledge, using documentary materials and collections of statements, and using in-depth interviews. This research concludes that the development of tax accounting thoughts is not separable from and depends on the development of accounting thoughts before the 2012 IFRS convergence. Before and after the IFRS convergence, the tax accounting thought keeps unchanged and under the industrial accounting paradigm with the following characteristics: rules-based, transaction-focused, historical cost accounting, matching cost against revenue, reliability-based. The shift of financial accounting paradigm from the industrial era to the information one does
not bring about the change in the tax accounting thought since the relevant tax laws have not changed yet. Finally, the book-tax difference gets increased. The other conclusion is to decrease the book-tax gap requires two methods. First, conceptually tax policymakers and their stakeholders should perform joint discussions so that tax reconciliation will be insignificant automatically. Besides, the tax imposition must consider legal certainty and ability-to-pay tenet so that taxpayers’ compliance can increase and compliance costs can decrease.