Abstract:
This article uses an Indonesian case study (the Gayus case) to explore critical issues in the relationship between tax and
corruption. More particularly, it considers the causes and impact of corruption at tax administrative levels in Indonesia, and
identifies and evaluates strategies the Indonesian revenue authority (the Directorate General of Taxation, or DGT) has
adopted, or can adopt, to ensure opportunities for such corrupt activity are mitigated or eliminated. The article adopts a
qualitative approach, utilising archival analysis supplemented by interviews and correspondence with key parties involved.
After a broad introduction which outlines the nature, types and impact of corruption in revenue authorities, the article
identifies the principles that typically underpin anti-corruption strategies in revenue authorities in developing countries,
together with examples of some of the anti-corruption strategies employed. It then considers the nature of the corrupt activity
exemplified by the Gayus case in Indonesia, how it arose, and how it came to light. This is followed by a consideration of
the impact upon the organisation, how the DGT dealt with it and what changes came about as a result in terms of anticorruption
strategies subsequently adopted and now operating in the DGT. The article concludes with a section on the
lessons learned and prospects for the future, both in Indonesia and elsewhere in the Asia-Pacific region.
