Core Tax Implementation: Ethical Considerations for MSME Tax Strategies

ABSTRACT : The Core Tax Administration System (CTAS) is a major reform in Indonesia’s taxation landscape, aiming to enhance transparency, compliance, and efficiency by integrating taxpayer data through National Identity Numbers (NIK) and Taxpayer Identification Numbers (NPWP). While the system promises streamlined administration, it presents ethical dilemmas for Small and Medium Enterprises (SMEs), particularly regarding tax planning strategies. This study explores the tax planning decisions of Bapak LH, a Samarinda-based SME owner, as he navigates the complexities of the new system. Utilizing qualitative research methods and ethnomethodological analysis, this research investigates how Bapak LH adapts his business practices to avoid becoming a Taxable Entrepreneur (PKP), which would subject him to higher taxes and more complex reporting. The study highlights the ethical concerns surrounding tax avoidance strategies, the balancing of legal compliance with business sustainability, and the long-term implications for SMEs under the Core Tax system. The findings emphasize the need for transparency and ethical responsibility in tax planning, while also considering the challenges SMEs face in adapting to regulatory changes.

KEYWORDS : Core Tax, Tax Planning, Ethical Dilemmas. MSME Tax payer