The underperformance of tax revenue in Indonesia, marked by a tax ratio significantly below the Asia–Pacific average, underscores a critical need for systemic reform. This deficiency is primarily attributed to the inefficiencies within the existing tax administration framework. To address this challenge, a comprehensive shift toward digitalization, epitomized by the Directorate General of Taxes’ (DGT) development of the Core Tax Administration System (CTAS), is proposed as a strategic solution. This study aims to: (1) analyze the current state of Indonesia’s tax ratio, (2) delineate the CTAS’s digital framework and its potential for integrated tax administration, and (3) assess the implications of CTAS’s digitalization efforts on improving the tax ratio. Employing a qualitative research methodology, this investigation synthesizes findings from an extensive literature review, focusing on digital innovations in tax administration such as Artificial Intelligence (AI), the Internet of Things (IoT), Big Data analytics, and Artificial Neural Networks (ANN). Preliminary results suggest that the CTAS is poised to revolutionize tax administration by streamlining processes, enhancing compliance, and ultimately elevating Indonesia’s tax ratio. This digital approach not only promises to mitigate current administrative shortcomings but also positions Indonesia at the forefront of adopting cutting-edge technologies for tax governance.