Generation Z aka Gen Z is identified as a generation that usually spends their time on social media, likes instant methods, and is considered lazy. However, behind all the bad stereotypes, Gen Z turns out to have enormous potential, one of which is for state revenue.
Based on the results of the 2020 Population Census of the Statistics Indonesia (BPS), Indonesia's demographics have changed where the composition of the Indonesian population is dominated by Generation Z (Gen Z). The number of generations born between 1997 and 2012 reached 27.8% of the total population.
The number of Gen Z individuals slightly exceeds that of Millennials born between 1991-1996, comprising 25.87% of the total population. This demographic advantage implies that Gen Z wields significant influence and plays a crucial role in the current and future development of Indonesia.
Gen Z is commonly known as the iGeneration, Internet Generation, or Net Generation, reflecting their existence in the digital age marked by rapid developments in information technology. Consequently, Gen Z exhibits a prominent proficiency in using technology. It can be asserted that information technology and Gen Z are intertwined, as nearly all activities they engage in rely on technological tools.
Not only technology but many aspects can be attributed to Gen Z, as this generation is recognized as the youngest cohort in the workforce. Being recent graduates, they naturally require time to adapt to the workplace.
Unfortunately, the adaptation process of this generation is frequently perceived with bias, and they are sometimes labeled as an instant generation overly reliant on conveniences and facilities. As a result, they are deemed less resilient and more susceptible to mental health problems.
According to the American Psychological Association (APA), in its survey, 75% of 300 Gen Zs often experience excessive anxiety. Meanwhile, data from GWI, a market research company in the United States, shows that 72% of Gen Z likes to embrace a relaxed and comfortable lifestyle, or called soft life.
Potential Expansion of Tax Base
Surveys concerning the negative aspects of Gen Z have contributed to the formation of a perception in society that portrays this generation as lazy, unreliable, and less adept at collaborating within a team in the professional world.
In fact, there are many positive sides that Gen Z has. Not only are they known to have dominant characteristics in terms of technology, communication, and ambition, but they are also creative. As a generation that is active in social media, Gen Z can utilize social media to broaden their horizons while earning money.
Indeed, not a few Gen Zs have already achieved success by establishing businesses through their proficiency and expertise in harnessing technological advancements. This aligns with various survey results that indicate Gen Z's strong inclination towards entrepreneurship rather than traditional employment.
The reason is that they prioritize work-life balance. This interest in entrepreneurship among Gen Z must be utilized well because it can be a potential tax revenue.
Moreover, many Gen Zs have succeeded at a young age. This can be the basis for the Directorate General of Taxes (DGT) to expand its tax base. Given that many of these generations already have careers and income, they should already know about the tax obligations they have to fulfill. For example, the obligation for Income Tax Article (ITA) 21.
If referring to regulations, ideally Gen Z already has a Taxpayer Identification Number (NPWP). As stipulated in the Director General of Taxes Regulation PER-04/PJ/2020, the age limit for someone to have a Tax ID Number is at least 18 years old.
Indeed, age is not the sole measure of someone having a Tax ID number and paying taxes. However, even if one does not have a Tax ID number due to the age limit, one can still perform their tax obligations. The tax payment obligation of someone under 18 years old can be done using their parents' Tax ID number.
Moreover, Gen Z's consumptive lifestyle plays a crucial role in stimulating economic activities and generating tax revenue. With a large level of public consumption, it will be directly proportional to the revenue from the Value Added Tax (VAT) side.
The Connection Between Gen Z and Social Media
Unfortunately, the government cannot guarantee that Gen Z will fulfill their tax obligations diligently. Hence, the government must engage and educate Gen Z using approaches aligned with their generational characteristics, primarily through the internet and technology.
For instance, the government can develop compelling content for publication on social media platforms, focusing on topics such as the importance of meeting tax obligations, the advantages of paying taxes, and the consequences of neglecting tax responsibilities. This strategy will help introduce the concept of taxes to Gen Z, especially those who may not be familiar with such obligations.
Another approach the government can take to offer tax education to the generation, which constitutes the majority in the 2024 elections, is to conduct tax counseling sessions with influencers who are considered capable of providing a comprehensive understanding of taxes.
If these young individuals possess sufficient knowledge and comprehend the significance of taxes in development, and do not perceive taxes as overly complicated or detrimental, they are more likely to fulfill their tax obligations.
According to the characteristics of Gen Z who likes to share on social media, they also do not hesitate to share their experiences or knowledge related to taxes on their social media, such as Instagram or TikTok. This is where the power of Gen Z lies, where they can influence their own generation or even across generations.
Essentially, the government cannot remain silent, hoping that everyone falling into the taxpayer category will naturally be aware of their tax obligations. Instead, the government is required to be able to innovate, particularly in its efforts to raise awareness, to keep pace with the times.
Therefore, the existence of Gen Z, which is part of the demographic bonus, should not be a threat but a blessing for tax revenue both now and in the future. (KEN)