MEDIATION FOR INDONESIAN TAX DISPUTES: IS IT A POTENTIAL ALTERNATIVE STRATEGY FOR RESOLVING INDONESIAN TAX DISPUTES?

Tax dispute resolution in Indonesia is not a quick, simple, and economical process. Taxpayers have to wait more than three years for a lawful resolution. This paper elaborates on how mediation can be a potential strategy to resolving tax disputes in Indonesia through administrative law. The Organisation for Economic Cooperation and Development recommended the establishment of a positive connection between taxpayers and the revenue body by changing their relationship from a confrontational to a collaborative one. Mediation encourages this positive bond and has been successfully implemented in Australia. A similar approach is strongly recommended for the Indonesian government. The auditing process provides an opportunity for mediation to minimize tax disputes. However, this process is not easy to implement because it needs political will and a strong desire by the government to implement changes. Mediation is an attempt to achieve a win-win solution and is in line with the principles of Pancasila, given that it ensures deliberation to reach an agreement. If implemented, then mediation will be a courteous approach to tax dispute resolution and will pave the way to a good post-dispute relationship in Indonesia.