DGT Issues Instructions on Appeal & Lawsuit Hearings at the Tax Court

JAKARTA, DDTCNews - The issuance of new implementing instructions concerning the handling of appeal and lawsuit hearings before the Tax Court by the Directorate General of Taxes (DGT) has garnered public attention throughout this week. The new implementing instructions are set out in the Director General of Taxes Circular Letter Number SE-6/PJ/2026.

The new implementing instructions were issued following the need to adjust the officials handling appeal and lawsuit hearings, adjust the coretax and perform administrative adjustments due to the use of the e-tax court.

SE-6/PJ/2026 contains provisions concerning appeal explanation letters and response letters, the designation of the hearing team, preparation of summaries of the subject matter of the dispute, preparation of dispute-handling strategies, implementation of hearings and handling of archives.

In general, an appeal explanation letter is prepared by the DGT regional office issuing the objection decision. An appeal explanation letter refers a letter containing a response to the grounds for an appeal filed by a taxpayer.

With regard to a response letter, SE-6/PJ/2026 stipulates that the letter is prepared by the DGT regional office if the letter/decision against which a lawsuit is filed is issued by the head of the regional office or by an official other than the head of the regional office within the relevant regional office.

If the letter/decision being challenged in a lawsuit is issued by an official other than the head of the regional office or by an official outside the regional office, the response letter is prepared by the Directorate of Tax Objections and Appeals. A response letter is a letter from the DGT, in its capacity as the defendant, containing a response to the lawsuit filed by the taxpayer, as the plaintiff.

The preparation of an appeal explanation letter is implemented by taking into account several matters, including compliance with the formal requirements under Articles 27 and 32 of the General Provisions and Tax Procedures Law (GPTP Law) and Articles 35 through 37 of the Tax Court Law; the conformity of the subject matter against which an appeal is filed with Article 27 paragraph (1) of the GPTP Law and Article 31 paragraph (2) of the GPTP Law; as well as the grounds and opinions presented by the appellant.

Once prepared, the appeal explanation letter is submitted to the Tax Court by post/courier/forwarding services or through the e-Tax Court, attached with:

1. the notice of tax assessment as well as the proof of delivery;
2. the notice of tax due or notice of land and building tax assessment as well as the proof of delivery;
3. withholding or collection receipts by third parties;
4. the objection letter as well as proof of receipt from the tax office;
5. the objection decision letter as well as the proof of delivery; and/or
6. the dispute matrix.

The appeal explanation letter must be submitted to the Tax Court no later than 3 months from the date on which the request for the appeal explanation letter is sent.

Meanwhile, the response letter is prepared by taking into account several matters, including the formal requirements under Articles 23 paragraph (2) and 32 of the GPTP Law and Articles 40 and 41 of the Tax Court Law; the conformity of the subject matter of the lawsuit with Article 23 paragraph (2) of the GPTP Law; as well as the grounds and opinions presented by the plaintiff.

Once the response letter has been prepared, it is submitted to the Tax Court by post/courier/forwarding services or through the e-Tax Court, attached with:

1. the letter/decision against which the lawsuit is filed;
2. proof of delivery for the letter/decision against which the lawsuit is filed; and/or
3. chronology of the issuance of the letter/decision against which the lawsuit is filed.

The response letter must be submitted to the Tax Court no later than 1 month from the date on which the request for the response letter is sent.

In addition to the issuance of SE-6/PJ/2026, a number of other tax issues also attracted readers’ attention over the past week. Some of these concerned the discontinuation of SIKOP and financial institutions, which are now required to fulfil self-certification obligations.

The following is a complete review of the tax-related articles.

New Reg. on Tax Consultants & Other Parties, Portal Replaces SIKOP

The Ministry of Finance (MoF) has decided to discontinue the use of the SIKOP application for administering tax consultant permit services. SIKOP will no longer be used following the issuance of MoF Reg. 55/2026 on Tax Consultants and Other Parties Acting as Taxpayers’ Attorneys.

“Following the issuance of MoF Reg. 55/2026 concerning Tax Consultants and Other Parties Acting as Taxpayers’ Attorneys, adjustments have been made to the mechanisms for the administration of tax consultant permit services. In line with these adjustments, all service processes will be temporarily transferred to a transitional portal before the next-generation system is officially implemented,” the MoF wrote on the official SIKOP website, as quoted on Thursday (August 27, 2026).

It should be noted that, although MoF Reg. 55/2026 is stated to have been issued, the new regulation is not yet available on the website jdih.kemenkeu.go.id.

DGT: Financial Institutions to Maintain Self-Certification Obligation

The DGT has requested financial services institutions and other entities to fulfil their obligations regarding the request, reasonableness clarification and maintenance of valid self-certification.

Referring to DGT Announcement Number PENG-4/PJ/2026, valid self-certification is required to support the identification of financial accounts as set out in Minister of Finance Regulation (MoF Reg.) 108/2025 and the common reporting standard (CRS).

In addition, financial institutions are also required to clarify the reasonableness of the self-certification by reference to information obtained by the financial institutions. After obtaining the valid self-certification and the results of the reasonableness clarification, the financial institutions must determine the country of residence of the account holders.

DGT Updates Governance of Cooperation Agreements with Other Parties

The DGT has updated the governance of cooperation agreements with other parties. The update is set out in Circular Letter No. SE-5/PJ/2026, which replaces SE-19/PJ/2014.

The circular letter was replaced because SE-19/PJ/2014 did not accommodate several aspects, including the separation of authority to sign, plan and implement cooperation agreements; requests for policy direction from the Director General of Taxes as well as the harmonisation process prior to signing.

“Thus, it is necessary to enact a director general of taxes circular letter concerning the governance of cooperation agreements within the Directorate General of Taxes,” reads the General section of SE-5/PJ/2026.

2027 Tax Expenditure Hits IDR632T, Manufacturing Takes Largest Share

The government is targeting income tax revenue of IDR1,277.7 trillion in the draft state budget 2027. The development of income tax revenue is deemed one of the key indicators for assessing the condition of the business sector and national economic activity.

The income tax revenue share reaches 49.31% of total tax revenue targeted at IDR2,591.4 trillion in 2027. This implies that income tax contributes nearly half of total tax revenue for the coming year.

"Income tax is the largest source of tax revenue, the performance of which is heavily influenced by developments in business-sector profitability, household income levels and commodity price dynamics, particularly in the natural resources sector," the government wrote in Volume II of the Financial Note and draft state budget 2027.

Gov’t Intensifies Multi-Door Approach to Close the Tax Gap in 2027

The government plans to promote tax law enforcement through a multi-door approach starting next year to narrow the tax gap, i.e., the difference between actual tax revenue collected and the tax revenue that should have been collected.

Through the multi-door approach, the government can foster inter-agency collaboration as well as apply other relevant legal instruments in addressing tax violations. This step is also important for improving taxpayer compliance.

" Strengthening the law enforcement function through the multi-door approach is expected to increase the perceived risk of non-compliance, narrow the tax gap and promote a better culture of compliance across all segments of taxpayers," the government wrote in Book 2 of the Financial Note and draft state budget 2027. (dik)