Survivorship Bias Limits Tax Potential Exploration

During World War II, Allied analysts examined bullet holes on aircraft that managed to return to base. Statistician Abraham Wald argued that the sections without holes should be reinforced, illustrating survivorship bias.

In tax administration, intensification refers to studying already‑registered taxpayers, whereas extensification targets potential taxpayers. Because data are readily available from filers, audited firms, or those submitting transfer‑pricing documentation, authorities tend to concentrate on them. Consequently, taxpayers who do not file returns or lack audited financials—who pose higher compliance risk—are often overlooked.

The Finance Ministry has instructed the tax authority to avoid disturbing compliant taxpayers while expanding the data pool by using the national ID (NIK) as a tax ID and implementing the coretax system. This broader approach aims to enable supervision of entities that do not generate their own data.