The Effect of PER-03/PJ/2022 on Tax System in Indonesia

Tax System in Indonesia – Before the inception of the Integrated Information System, the Indonesian government faced the obstacle of not being able to gain information about the flow of cash and goods. Recently, there is a problem regarding the export quota for Crude Palm Oil (CPO). Furthermore, information regarding the flow of cash and goods is also important since it directly affects the intensification of the country’s income, which is tax. 

To further integrate the information system, the government has tried several solutions. First, introduce the Automatic Exchange of Information (AEOI), an information system to help the tax matters of companies in the banking, stock market, insurance sectors. Second, involving the National Land Agency (Badan Pertanahan Nasional) and Notary to gain information regarding the ownership of tax-mandatory properties such as land and building. Third, involving the Regional Revenue Department (Dinas Pendapatan Daerah) and One-Stop Administration Services Office (SAMSAT) to gain information on the ownership of tax-mandatory objects, specifically cars, motorcycles, and other vehicles. Fourth, mending the Law of Value-Added (VAT) Tax, done by changing some of the goods/services that are not previously VAT Tax objects into VAT Tax objects.

New Rule in Tax System in Indonesia

With the inception of the Rule Number PER-03/PJ/2022 in the tax system in Indonesia, the Directorate General of Tax is trying to introduce the use of ID Number (Nomor Induk Kependudukan) in order to oversee the flow of cash and goods. With this newly introduced rule, the government will be able to identify the tax-mandatory income of Indonesian citizens, specially those who are yet to acquire a Tax ID Number (NPWP). 

In the rule it is mandatory for taxable employers (Pengusaha Kena Pajak), as the providers of taxable goods (Barang Kena Pajak) and taxable services (Jasa Kena Pajak), to list information such as name, address, Tax ID number (NPWP), and ID Number (NIK) on a Tax Invoice. If the taxable employers fail to provide this information, they could potentially receive an administrative sanction, which is a 1% fine deducted from the tax base value (Dasar Pengenaan Pajak). 

From the side of the recipients of taxable goods and services, they have to be more careful when it comes to either doing transactions or reporting their expenses and revenues. Every transaction involving taxable goods/services that are not final consumption or direct consumption, is considered to have business purposes. In this situation, it is more likely for the nearest Tax Office to ask questions regarding the revenue and income source of the taxpayer.

Changes on Tax Invoice Regulation

The following are the changes on regulation regarding Tax Invoice in accordance with the Directorate General of Taxes Rule Number PER-03/P/2022. First, The information that must be on the Tax Invoice regarding the handover of taxable goods/services to the recipients are name, address, Tax ID Number, and ID Number. Next, the name, Tax ID number in the Tax Invoice must be the exact match with the name and Tax ID number registered on the SKPP. 

Meanwhile, the address must be a match with the registered taxable goods/services. Furthermore, you must upload the electronic Tax Invoice (E-Faktur) on the 15th of each month. Taxable employers whose all/parts of business endeavors involve the handover of taxable goods/services to final consumers via electronic trades. Finally, taxable employers who do not report their Tax Invoice will get an administrative sanction which is a 1% fine.

How can Double M help?

The government is updating the tax regulations in order to track cash flow more efficiently. Double M strives to keep you updated about the ever-changing regulations. Should you have any inquiries, please contact us.