Via Coretax, Penalty Reduction Revenue Potential IDR40T
JAKARTA, DDTCNews - The Directorate General of Taxes (DGT) projects that payment of principal tax liabilities during the operation of the administrative penalty reduction or nullification programme will reach IDR40.2 trillion. This topic is among the subjects covered by national media today, Thursday (15/10/2026).
The reduction or nullification of administrative tax penalties is governed by MoF Reg. 118/2024, as amended by MoF Reg. 71/2026 and took effect in October 2026. Under this policy, taxpayers that fulfil the conditions may apply for a reduction or nullification of administrative penalties.
"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.
Bimo explained that the IDR40.2 trillion projection covers payment of principal tax liabilities across four of the DGT's business processes. From supervisory activities, payment of principal tax liabilities is estimated to reach IDR12 trillion. Meanwhile, the potential for payments from the audit process is projected at IDR13 trillion.
Further, the DGT estimates that payment of principal tax liabilities through collection activities will reach IDR9.6 trillion. Payments arising from the utlisation of new database resources are projected at IDR5.6 trillion.
In addition to calculating the revenue potential from principal tax liability payments, the DGT has also estimated the potential reduction in revenue from administrative penalties resulting from the granting of these facilities. This figure is estimated to reach IDR14.8 trillion.
The potential reduction in revenue comprises administrative penalties from supervisory activities of IDR5.7 trillion, audits of IDR2.9 trillion, collection activities of IDR3.7 trillion and utilisation of new database resources of IDR2.5 trillion.
Applications for Penalty Reduction Available via Coretax
The DGT has affirmed that 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).
Pursuant to the provisions under Article 26 and Article 27 of MoF Reg. 118/2024, the DGT will conduct a 2-stage examination process in respect of an application for penalty reduction or nullification. Pursuant to Article 26 paragraph (1) of MoF Reg. 118/2024, the first stage of examination is aimed at examining:
- fulfilment of the main requirements (the conditions under Article 23 and Article 24 of MoF Reg. 118/2024, as amended by MoF Reg. 71/2026); and
- fulfilment of the additional requirements (the conditions under the Fourth Dictum of KEP-239/PJ/2026).
Should both conditions not be fulfilled, the DGT will not issue a Decision and will instead issue an application return letter. Where the application does meet the conditions, the DGT will proceed to the second stage of examination.
The second stage of examination is conducted to examine the type of penalty, the extent of the reduction or nullification and any other specific requirements. If the conditions are fulfilled, the DGT will issue a penalty reduction or nullification decision letter.
Such a decision letter may take the form of: granting the application in full; or granting the application in part. Pursuant to Article 29 paragraph (1) of MoF Reg. 118/2024, the decision must be issued no later than 6 months from the date on which the application for penalty reduction or nullification is received.
In addition to this news, there is coverage of plans to add VAT collection agents under the tax collection system for cross-border digital transactions (sistem pemungutan pajak atas transaksi digital luar negeri/SPP-TDLN in Indonesian) scheme. There is also discussion of a proposal to raise the threshold for the final income tax scheme applicable to micro, small and medium enterprises (MSMEs).
The following is a full review of the tax articles.
Tax Penalty Reduction Applications Need No Material Evidence
Taxpayers wishing to apply for a reduction or nullification of administrative tax penalties are no longer required to prove that the penalty arises from negligence or is not due to wilful misconduct.
Director of Tax Dissemination, Service and Public Relations of the DGT, Inge Diana Rismawanti, stated that taxpayers need only prepare an application letter to which a declaration letter must be attached, stating that the administrative penalty arose from negligence or not due to the taxpayer's wilful misconduct. "An application letter accompanied by the declaration letter is intended to inform the director general of taxes that there is a condition of negligence or that the matter was not the taxpayer's wilful misconduct," she said.
Inge also noted that taxpayers are not required to attach supporting documents or data to prove that the administrative tax penalty arose from negligence or not due to the taxpayer's wilful misconduct. She explained that taxpayers need only fulfil the formal requirements pursuant to Article 23 of MoF Reg. 118/2024, as amended by MoF Reg. 71/2026 and KEP-239/PJ/2026. (DDTCNews)
KEP-239/PJ/2026: Art. 14(4) of GPTP Law Penalty Discounted by 90%
Director General of Taxes Decree Number KEP-239/PJ/2026 reduces the administrative penalty in the form of a fine imposed on taxable persons (pengusaha kena pajak/PKP in Indonesian) that are late in or fail to issue a tax invoice as well as taxable persons that fail to complete a tax invoice in full.
As stipulated under Article 14 paragraph (4) of the General Provisions and Tax Procedures (GPTP) Law, the fine imposed on the relevant taxable persons amounts to 1% of the tax base (dasar pengenaan pajak/DPP in Indonesian). With the entry into force of KEP-239/PJ/2026, the said fine is reduced by 90% or 75%.
"The reduction or nullification of administrative penalties referred to in the First Dictum shall be granted in the event that the taxpayer applies to the director general of taxes no later than 1 October 2028," reads the Third Dictum of KEP-239/PJ/2026. (DDTCNews)
DGT Targets 30 Banks & Fintech to Collect VAT on Digital Transactions
The Directorate General of Taxes (DGT) plans to appoint 30 banks and fintech companies as VAT collection agents for cross-border digital transactions under the tax collection system for cross-border digital transactions (sistem pemungutan pajak atas transaksi digital luar negeri/SPP-TDLN in Indonesian). Bimo stated that the appointments will be made after the companies have prepared the necessary systems and digital infrastructure.
"I have just held a meeting with 30 platforms that will participate [as VAT collection agents under the SPP-TDLN]. We have given them time until November," he said.
To date, the DGT has appointed 6 parties as VAT collection agents, namely 5 banks belonging to the Association of State-Owned Banks (Himpunan Bank Milik Negara/Himbara in Indonesian), including BRI, Mandiri, BTN, BNI and BSI, and 1 fintech company, PT Fintek Karya Nusantara (LinkAja). (DDTCNews, Bisnis Indonesia)
House Calls for MSME Final Income Tax Threshold to Be Raised
Commission XI of the House of Representatives is urging the government to increase the turnover threshold under the MSME final income tax scheme, which currently stands at IDR4.8 billion. Commission XI member Fathi stated that the turnover threshold needs to be raised to support efforts to broaden the tax base and to facilitate taxpayers in calculating their income tax obligations.
"If the tax threshold is raised, we believe the potential could be even broader. People can easily perform the calculation and the formula is fairly straightforward," said Fathi.
There are currently entrepreneurs that are not yet classified as large businesses but are unable to avail themselves of the MSME final income tax scheme because their turnover has already exceeded IDR4.8 billion per year. Pursuant to Government Regulation (Gov. Reg.) 20/2026, taxpayers whose turnover has exceeded IDR4.8 billion per year must calculate and pay income tax pursuant to the general provisions, rather than simply multiplying turnover by a rate of 0.5%. (DDTCNews)
BRITACOM Members Encouraged to Adopt Cooperative Compliance
Member of the Belt and Road Initiative Tax Administration Cooperation Mechanism (BRITACOM) Advisory Board and President of the International Tax and Investment Center (ITIC), Daniel Witt, has encouraged tax authorities across various jurisdictions to achieve compliance through building mutual trust, rather than solely through enforcement.
Witt noted that one approach tax authorities can take to improve compliance through a trust-based approach is a cooperative compliance programme.
"Cooperative compliance is grounded in the principle that tax authorities need to focus on areas that genuinely carry a risk of tax avoidance. This reflects the growing sense of mutual trust between taxpayers and tax authorities," said Witt. (DDTCNews) (dik)