Yes you can use toilet paper in a composting toilet.
The toilet paper will compost in the toilet just like the poop will but the toilet paper will just take a bit longer to compost in the toilet than the poop will.
Just like toilet paper can be put in a regular toilet you can use toilet paper in the composting toilet and it will be just fine.
However the toilet paper will still be visible for awhile in the composting toilet because it takes a bit longer for it to break down.
Just don't put diapers, tampons etc into the composting toilet because diapers and other things like that will not compost.