DGT Waives Tax Penalties by up to 100%, Applications via Coretax

JAKARTA, DDTCNews - The reduction or nullification of administrative tax penalties by up to 100% granted through the Director General of Taxes Decree No. KEP-239/PJ/2026 has attracted public attention over the past week.

KEP-239/PJ/2026 has been issued to improve taxpayer compliance and stimulate the national economy, taking effect from 8 October 2026. This policy also follows up on Article 27A of the Minister of Finance Regulation (MoF Reg.) 118/2024, as amended by MoF Reg. 71/2026.

Under KEP-239/PJ/2026, the policy on the reduction or nullification of penalties applies to the late filing of annual income tax returns (up to the 2025 tax year) and periodic tax returns (up to the September 2026 taxable period) with an underpayment status.

This policy also applies to voluntary amendments of tax returns as well as late payment or remittance of tax payable. In addition, incentives are also provided for administrative penalties stated in a notice of tax assessment (surat ketetapan pajak/SKP in Indonesian), a notice of land and building tax (L&B Tax) assessment or a notice of tax collection (surat tagihan pajak/STP in Indonesian).

Penalties arising from audit findings relating to assets that were not disclosed or were insufficiently disclosed, under the voluntary disclosure programme (program pengungkapan sukarela/PPS in Indonesian) pursuant to MoF Reg. 196/2021may also be eligible for a reduction in penalties.

In general, the level of reduction or nullification of penalties granted varies depending on the type of penalty and the time at which the tax obligation is fulfilled. Indeed, taxpayers may obtain a reduction or nullification of administrative penalties of up to 100%, provided they meet the prescribed requirements.

For example, incentives for penalties arising from the late filing of annual income tax returns for tax years up to and including 2025 with an underpayment status; and/or (ii) periodic tax returns for taxable periods up to and including September 2026 with an underpayment status, are granted as follows:

• 00% nullification is granted where the tax return is filed during the period between 8 October 2026 and 31 December 2026;
• 50% reduction is granted where the tax return is filed during the period between 1 January 2027 and 31 March 2027; and
• 25% reduction is granted where the tax return is filed during the period between 1 April 2027 and 30 June 2027.

Details of the types of administrative penalties and the level of reduction granted are set out in the appendix of KEP-239/PJ/2026. To benefit from these facilities, taxpayers must apply for the reduction or nullification of administrative penalties to the DGT no later than 1 October 2028.

To submit such an application, taxpayers must satisfy a number of requirements as set out in Article 23 and Article 24 of MoF Reg. 118/2024, as amended by MoF Reg. 71/2026. In addition, taxpayers submitting such an application must fulfil the following requirements:

• Not having filed a lawsuit and/or other legal remedies. This must be evidenced by attaching a statement letter declaring that no lawsuit and/or other legal remedies have been filed;
• Having filed a lawsuit and/or other legal remedies, but having since withdrawn them. This must be evidenced by attaching an application letter for the withdrawal of the lawsuit and/or other legal remedies;
• Submitting a duly stamped statement letter declaring that the administrative penalty arose due to negligence or not through the taxpayer's wilful misconduct; and
• The reduction or nullification of administrative penalties is granted only in respect of administrative penalties that have not yet been paid or settled by the taxpayer.

The DGT projects that payment of principal tax liabilities during the operation of the administrative penalty reduction or nullification programme will reach IDR40.2 trillion. On the other hand, the potential reduction in revenue from administrative penalties resulting from the granting of these facilities is estimated to reach IDR14.8 trillion.

"This is an estimate, so there will certainly be deviation from what is implemented, depending on the taxpayer's risk appetite. It also depends on whether they wish to do so this year or next year, as the period remains open and can be utilised until 2027," said Director General of Taxes, Bimo Wijayanto.

The reduction or nullification of administrative tax penalties is not granted automatically to taxpayers. To obtain these facilities, taxpayers must apply to the director general of taxes and fulfil the prescribed requirements.

Taxpayers wishing to apply for a reduction or nullification of administrative penalties may apply via coretax. The application may be submitted through the Taxpayer Services menu and the Administrative Service Application sub-menu.

Next, select the taxpayer service type with code AS.26 Objections and Non-Objections. Then, select the sub-service category AS.26-03 LA.26-03 Application for Reduction or Nullification of Administrative Penalties (Article 36 paragraph (1) subparagraph a of the General Provisions and Tax Procedures Law).

In addition to the news about the reduction of administrative tax penalties, several other tax issues have also garnered readers’ attention over the past week. These include the proposal to raise the threshold for final income tax for micro, small and medium enterprises (MSMEs) as well as the administration of the tax competency examination.

Here is a comprehensive review of the tax articles.

House Proposes Raising MSME Final Income Tax Threshold

House of Representatives Commission XI has urged the government to raise the turnover threshold for the MSME final income tax scheme, which currently stands at IDR4.8 billion. Commission XI member, Fathi, said the turnover threshold should be increased to support efforts to broaden the tax base and facilitate taxpayers in calculating their income tax liabilities.

“If the tax threshold is raised, we believe its potential could be expanded further. It would make calculations easier and the formula is fairly simple,” Fathi said.

To date, there are entrepreneurs that are still not classified as large enterprises but can no longer benefit from the MSME final income tax scheme because their annual turnover has exceeded IDR4.8 billion. Under Gov. Reg. 20/2026, taxpayers whose annual turnover exceeds IDR4.8 billion must calculate and pay income tax pursuant to the general provisions, rather than simply multiplying their turnover by the 0.5% rate.

Registration Opens for Tax Competency Examination

The Financial Education and Training Agency (Badan Pendidikan dan Pelatihan Keuangan/BPPK in Indonesian) has announced the opening of registration for the tax competency examination (uji kompetensi perpajakan/UKP in Indonesian) for periods 1 through 8 of 2026. Pursuant to announcement No. PENG-7/PP/2026, registration will open from Friday (16/10/2026) at 08:00 Western Indonesian Time and close on Tuesday, 20 October 2026 at 17:00 Western Indonesian Time.

The examination will be conducted online simultaneously, with participants sitting the test from their respective locations. The UKP for periods 1–8 of 2026 is scheduled to take place on 26–29 October 2026.

The BPPK urges prospective participants who do not yet have a single sign-on (SSO) account or whose profiles have not been verified to register and submit their data for verification promptly. Participants are also advised to ensure that all information is entered accurately to avoid verification failures that could hinder their examination registration.

DGT Develops AI to Track Assets of High-Net-Worth Taxpayers

Deputy Minister of Finance, Nurkholisoh Ibnu Aman, said the Directorate General of Taxes (DGT) is currently developing a dashboard and artificial intelligence (AI) to map the assets of high net worth individuals (HNWIs).

Nurkholisoh said the dashboard in question is capable of presenting tax data unit on individuals, including their assets and companies as well as the relationships between the data within the dashboard. According to him, the data presented on the dashboard and managed by AI will help DGT in detecting changes in the status of assets and taxes that should be payable.

Meanwhile, Bimo emphasized that the use of AI in tax business processes will continue to maintain the confidentiality of taxpayer data. "We will not use open-source tools to run our AI system. We implement the AI system using our internal capacity as well as through cooperation with other tax authorities that already have sophisticated AI systems, such as China," he claimed. See DGT Employs AI in Tax Business Process, Taxpayer Data Secure?

DGT Targets 30 Banks & Fintech to Collect VAT on Digital Transactions

The DGT is targeting 30 banks and fintech companies to be appointed as VAT collection agents through the tax collection system for cross-border digital transactions (sistem pemungutan pajak atas transaksi digital luar negeri/SPP-TDLN in Indonesian) mechanism.

Bimo said the appointment as VAT collection agents will be made once the 30 companies have each prepared their respective systems and digital infrastructure. "We will give them time until November," he claimed.

To date, the DGT has appointed a total of 6 parties acting as VAT collection agents. This number comprises 5 Himbara banks, namely BRI, Mandiri, BTN, BNI and BSI, as well as 1 fintech company, namely PT Fintek Karya Nusantara (LinkAja).

SOE Restructuring: DGT Introduces 0% Final Income Tax Object Codes

Director General of Taxes Regulation PER-12/PJ/2026 introduces several new taxable object codes related to state-owned enterprise (SOE) restructuring. Based on the descriptions of these codes, six types of transactions related to SOE restructuring are subject to a final income tax rate of 0%.

This policy is in line with Danantara’s plan to restructure or streamline SOEs. Danantara CEO, Rosan Roeslani, previously stated that Danantara had reduced the number of SOEs and their subsidiaries from 1,074 entities to 250 through divestments, mergers, liquidations or vertical consolidations.

Currently, the government’s facility to support these streamlining efforts is the use of book value pursuant to MoF Reg. 1/2026.

Official: Plastic Import Duty Cut to 0% for 6 Months

The government, through MoF Reg. 68/2026, has officially applied a 0% import duty tariff on imports of certain plastic raw materials. The imposition of the 0% import duty tariff constitutes an incentive to support the competitiveness of the downstream plastics industry amid the rise in global plastic prices.

A 0% import duty tariff is granted to imports of plastic raw materials falling within 6 HS codes. Previously, imports of plastic products under HS codes 3901.10.12, 3901.10.19, 3901.10.99, 3902.10.30 and 3902.10.90 were subject to a 10% import duty, whereas products under HS code 3902.30.30 were subject to a 5% import duty.

"The main urgency is to fulfil the needs of industrial raw materials by taking into account domestic supply conditions and price developments in the international market," said Coordinating Minister for the Economy, Airlangga Hartarto. See Raw Material Prices Soar, Government Nullifies Plastic Import Duty (dik)

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