Jurnal Akuntansi, Vol 10 No. 2, Juli 2023 p-ISSN 2339-2436 Http://doi.org/10.30656/Jak.V10i2.6218 e-ISSN 2549-5968 Jurnal Akuntansi : Kajian Ilmiah Akuntansi 186 | Akuntansi COMPLIANCE RISK MANAGEMENT ON INDONESIAN TAXATION: IS IT AS GOOD AS EXPECTED? Erlin Phinanti erlinphinanti@gmail.com Akuntansi, Universitas Indonesia Agustinus Lumban Tobing augie.nicholas@gmail.com Akuntansi, Universitas Indonesia Abstrak ____________________________________________________________ This research was conducted on the revised Compliance Risk Management (CRM) of the tax administration by the Directorate General of Taxes (DJP) in 2021 through SE-39/PJ/2021. DGT issued guidelines for implementing CRM-based and business intelligence-based supervisory activities. The new policy should be evaluated to find out whether the policy increases the level of tax compliance. This qualitative case study conducted interviews to directly obtain practitioners' data. The research was conducted at the East Jakarta DGT Regional Office, and Jakarta Pulogadung Primary Tax Service Office (KPPP). William Dunn’s evaluation framework was employed to gain more comprehensive results of effectiveness, efficiency, adequacy, equity, responsiveness, and appropriateness. This study concluded that CRM is not effective to raise the tax compliance rate. In addition, this study proposed several suggestions from the supervisory function executors regarding the future improvement and development of CRM, such as cleaner data. The results of this study can be used as a reference in developing CRM. In addition, other instruments and approaches should be considered to gain wider research insights. Keywords: Compliance Risk Management, Taxation, Supervisory Function, Public Policy Evaluation INTRODUCTION Taxes are the source of state revenue that can be used by the government as a means to maintain state revenue sustainably (Rosdiana and Irianto in Andika, 2018). The Directorate General of Taxes is in charge of ensuring that the tax revenue meets the target. However, low tax compliance among taxpayers appears as a challenge. It is published on the website of DDTC news agency (2022) that the ratio of annual tax returns in 2021 reached 84% which increased from only 77.63% in 2020 (Appendix 1). Unfortunately, this higher formal compliance is not proportional to state revenue. In 2020 the tax revenue decreased by 1 trillion, while taxpayers’ compliance in 2020 increased by 4.5% from 2019. A higher number of annual tax returns without high tax compliance tends to increase tax avoidance. For this reason, DGT is expected to increase material compliance testing (Prabandaru, 2019; Arief, 2021; MUC Consulting, 2021). The DGT (Directorate General of Taxes) has issued a regulation SE-24/PJ/2019 concerning "Implementation of Compliance Risk Management in monitoring, supervision and collection activities at the Directorate General of Taxes" which includes 3 (three) functions that apply CRM. This circular letter replaced the letter SE - 02/PJ/2016 concerning the Benchmark Behavioral Model and its Follow-up. Nurdhin (2017) stated that BBM (Benchmark Behavioral Model) has several drawbacks related to its limited use for corporate taxpayers and benchmarking that applies only to companies under the same type of business category (KLU). Usually, the tax officer will compare financial ratios, for example, Gross Profit Margin,