Gov’t to Relax Tax Administrative Sanctions

Gedung Direktorat Jenderal Pajak. TIRTO/Andrey Gromico

In a bid to strengthen the economy and increase taxpayer compliance, the Government has announced it will relax administrative sanctions in a planned tax provisions and facilities bill, according to Ministry of Finance’s Director General of Taxation Robert Pakpahan.

“The Government will adopt rearrangement, including in interest sanction for underpayment due to the correction of annual and periodic tax return forms, which is currently at a rate of 2% per month from underpaid taxes to a reference rate plus 5% divided by 12 months (reference rate + 5%)/12 months. The amount of interest per month and a fine are stipulated by Minister of Finance,” Robert said on Thursday (5/9).

Furthermore, interest penalty for underpayment due to the stipulation of tax assessment letter, which is currently at a rate of 2% per month from underpaid taxes, according to Robert, will be amended to the reference rate plus 10% divided by 12 months or (reference interest rate) + 10%)/12.

The amount of interest per month and a fine are also stipulated by Minister of Finance, he added

In the meantime, financial penalties for taxable employers (PKP) who fail to issue tax invoice or issue it on time, which is currently at a rate of 2% of the tax base, will later be subject to 1% of the tax base.

In addition, financial penalties for entrepreneurs who fail to report businesses to be confirmed as PKP are currently not subject for sanction. However, Robert stressed that those entrepreneurs would be subject to a sanction of 1% of the tax base equivalent to PKP who fail to issue tax invoice or issue it on time. (Ministry of Finance PR/ES)

Translated by: Muhardi

Edited by: M. Ersan Pamungkas