Abstract

This study examines tax administration reform that began in Indonesia since 2001 from leadership and human resource management perspectives. The discussion combines theory and practice of leadership in tax authority (Directorate General of Taxation/DGT) based on a wide range of literature reviews on leadership theory, with the later emphasizing transactional and transformational leadership framework (Burns 1978, Bass 1985). To describe current leadership characteristics, this study employs semi-structured interviews with 52 DGT employees (22 first-level managers and 30 staffs). The result shows that transformational leadership characteristics are predominant among the first and middle-level managers. However, interviews as an alternative method to find underlying reasons, as suggested by Yukl (2010:515), explain that the weakness of the reward and punishment mechanism has lowered the transactional leadership characteristics among managers. This study also concludes that there are barriers and influences on the DGT leadership development process in terms of cultural, institutional and human resource capabilities issues.