Jakarta, INTI - Indonesia’s digital infrastructure development is progressing through tax administration modernization and data center expansion. South Korean technology company LG CNS developed the Core Tax Administration System (Coretax), valued at IDR 1.23 trillion, in collaboration with Qualysoft. The company is also partnering with Sinar Mas to build a data center facility scheduled to enter trial operations on December 1, 2026.
According to Mark Mansik Won, President Director of PT LG CNS Indonesia, Coretax was launched nationwide in January 2025. The project faced significant challenges in integrating previously separate tax administration systems while accommodating evolving user requirements and regulatory changes.
Mark explained that the complexity of Indonesia’s business processes made system integration particularly demanding, especially given the long-term nature of the project and the continuous evolution of regulations and user needs.
Following Coretax’s launch, some taxpayers reported difficulties accessing and using the platform. Mark acknowledged that problems occurred during the initial implementation but did not specify the technical causes of all reported disruptions.
LG CNS subsequently coordinated with Indonesia’s Directorate General of Taxes (DJP) and brought in technical specialists from South Korea to investigate and resolve the issues. According to Mark, the initial problems have since been addressed, and system stability has improved compared with the early implementation period.
LG CNS continues to provide technological support for Coretax infrastructure and databases under its contractual obligations. However, the company is not directly responsible for the system’s daily operations and maintenance.
LG CNS Explores AI Opportunities and Expands Data Center Investments
Mark also sees potential for artificial intelligence (AI) to support tax services. However, decisions regarding AI implementation remain with the DJP, while LG CNS is prepared to provide technological assistance if required.
Beyond tax administration, LG CNS is partnering with Sinar Mas to develop a data center that is nearing completion. Mark said the collaboration combines LG CNS’s technological expertise with Sinar Mas’s customer network and business strengths.
The facility is intended to serve external customers rather than exclusively supporting the two companies’ internal requirements. Nevertheless, LG CNS has not disclosed the data center’s location, computing capacity, investment value, or commercial operation date.
As demand for cloud computing and AI infrastructure grows, the company is also assessing opportunities to support Indonesia’s expanding digital ecosystem. Although LG CNS has global experience and collaborates with NVIDIA on related technologies, it currently has no plans to build a high-performance, GPU-based AI data center in Indonesia.
Mark stated that the company remains ready to provide support if customers decide to develop such facilities.
Balancing Data Center Growth with Energy and Water Sustainability
The expansion of data centers has raised concerns about electricity and water consumption, particularly among communities located near these facilities.
Mark acknowledged the dilemma faced by residents who depend on digital services but are concerned about the environmental impact of data centers in their neighborhoods. He emphasized that these facilities can affect local electricity and water resources.
According to Mark, addressing these concerns requires balancing industrial development with community interests. Open dialogue, cooperation, and a willingness to compromise are essential to finding practical solutions.
He also highlighted the government’s role in facilitating communication between industry stakeholders and local communities. Governments themselves require data center infrastructure to support digital transformation and public services, making effective coordination essential for sustainable development.
Ultimately, LG CNS’s activities in Indonesia reflect two important aspects of digital transformation: modernizing public administration through integrated technology systems and expanding the infrastructure needed to support cloud computing and future AI applications. Ensuring that these developments remain reliable, commercially viable, and environmentally responsible will be crucial to Indonesia’s long-term digital growth.
Conclusion
LG CNS is contributing to Indonesia’s digital transformation through the development of the Coretax tax administration system and its partnership with Sinar Mas to expand data center infrastructure. As demand for cloud computing and AI grows, the company highlights the importance of reliable technology, government collaboration, and responsible energy and water management in building a sustainable digital ecosystem.
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