Efficiency effectiveness of PPh 21 reporting via taxation digitalization in state institutions using value for money

Abstract

This research aims to analyze the impact of tax administration digitalization on the reporting performance of Income Tax (PPh) Article 21 in public educational institutions using the Value for Money approach. In contrast to previous studies that generally focus on individual taxpayer compliance or the private sector, this study positions public educational institutions as public-sector corporate taxpayers and integrates measurements of effectiveness and efficiency into a single, comprehensive evaluative framework. The study employs an evaluative quantitative descriptive approach based on 240 secondary administrative reporting documents, covering periods both before and after digitalization. The results indicate that digitalization increased reporting effectiveness from 85.00% to 96.67%, reflecting a significant reduction in calculation errors. From an efficiency perspective, the average reporting time decreased from 6.5 hours to 2.1 hours per reporting period, representing a time efficiency rate of 32.31%, while administrative costs decreased by 35.38%. The integration of increased accuracy and reduced resource consumption demonstrates that digitalization not only improves reporting quality but also creates added value in public-sector tax administration governance. The contribution of this research lies in the application of the Value for Money approach as a performance evaluation instrument for PPh Article 21 reporting within the context of digitalization in public educational institutions, an area that remains limited in the literature. These findings offer theoretical implications for the development of public-sector tax performance evaluation and practical implications for optimizing government tax digitalization policies.