BPK Flags Tax Incentive Supervision at BKPM, DGT Receives No Report
JAKARTA, DDTCNews - The Audit Board (Badan Pemeriksa Keuangan/BPK in Indonesian) has highlighted that the implementation of supervision and reporting of investment facilities by the Ministry of Investment and Downstreaming/Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal/BKPM in Indonesian) does not comply with the applicable provisions during the period from 2021 to the first half of 2025. This topic is among the reviews featured in the national media today, Tuesday (20/10/2026).
One of the issues identified is that the BKPM did not prepare and submit quarterly reports on the issuance of tax incentives to the Directorate General of Taxes (DGT). The submission of such reports was replaced by granting the DGT online single submission (OSS) access.
BPK, in its audit report (laporan hasil pemeriksaan/LHP) in Indonesian with specific objectives, disclosed that during the period from 2021 to the first half of 2025, the Ministry of Investment and Downstreaming/BKPM never prepared or submitted quarterly reports on the issuance of tax holiday and tax allowance incentives to DGT.
BPK has also identified a number of other issues in the implementation of investment facilities supervision. These issues include the assessment of entrepreneurs' compliance, the completeness of data on facilities in the OSS and data access for provincial investment and integrated one-stop services offices (dinas penanaman modal dan pelayanan terpadu satu pintu/DPMPTSP in Indonesian).
Further, the DGT has also found other issues, including that the deputy for implementation control did not conduct compliance assessments regarding the fulfilment of obligations by entrepreneurs in relation to the facilities received.
"Based on the findings of the audit of supervision documents, it was found that in the implementation of routine field inspections, the deputy for implementation control did not conduct an assessment related to the fulfilment of obligations by entrepreneurs in respect of the investment facilities they received," BPK stated in the specific-objective audit report.
BPK noted that the assessments conducted by the Deputy for Implementation Control were carried out solely based on the number of decisions on the granting of investment facilities received by entrepreneurs.
Further, the OSS supervisory subsystem also does not comprehensively present the data on masterlist facilities granted to entrepreneurs.
The OSS should automatically retrieve information on facilities received by entrepreneurs into the official report of audits (berita acara pemeriksaan/BAP in Indonesian) to be used during field inspections. However, BPK's audit findings indicate that the OSS supervisory subsystem does not completely present the data on masterlist facilities within the BAP. The presented data on facilities covers only tax holiday and tax allowance incentives granted to entrepreneurs.
On the other hand, the Ministry of Investment and Downstreaming/BKPM has not provided data access and assessment of compliance with facilities to the provincial DPMPTSP as the implementing body for routine field inspection deconcentration activities.
BPK's audit of the BAP for field inspection activities conducted by the East Java and Central Java DPMPTSP revealed that the supervision results recorded in the BAP did not include audit findings related to investment facilities.
The DPMPTSP in both provinces did not conduct compliance supervision because they did not have access to display the list of entrepreneurs granted investment facilities.
"In addition, provincial DPMPTSP offices were also unable to enter data on the assessment of facility compliance when completing the BAP. Such data had been automatically populated and could not be modified," BPK stated.
In light of these conditions, the BPK has encouraged the Ministry of Investment and Downstreaming/BKPM to guide the deputy for investment implementation control, given that the deputy did not supervise the fulfilment of obligations by entrepreneurs.
The Ministry of Investment and Downstreaming/BKPM also needs to adjust the OSS supervisory subsystem in terms of the provision of data on masterlist facilities in the BAP as well as data access for supervision implementers at provincial DPMPTSP offices.
"The Minister of Investment and Downstreaming/Head of BKPM stated agreement with the BPK's recommendations and will follow up by instructing the relevant parties to provide guidance, proposing to the OSS development team to adjust the OSS supervisory subsystem and preparing quarterly reports pursuant to the applicable provisions," BPK stated.
In addition to this news, there is a review of the reasons for including the regulation of tax consulting firms in MoF Reg. 55/2026. There is also a discussion on the reduction of penalties in respect of notices of tax collection (surat tagihan pajak/STP in Indonesian).
The following is a full review of the tax articles.
BPK Highlights Assessment of Tax Holiday Periods at BKPM
BPK's audit also revealed that the verification of the granting of tax holiday periods in the Minister of Finance Decree (MoF Decree) had not been carried out pursuant to the applicable provisions.
Referring to the specific-objective audit finding report on the Ministry of Investment and Downstreaming/BKPM, it was found that the Ministry of Investment and Downstreaming/BKPM added requirements for the calculation of the internal rate of return (IRR) and payback period for entrepreneurs applying for a tax holiday.
"The evaluation of the IRR and payback period requirements is conducted after the tax holiday facilities application documents have received approval from the director of business facilities services," BPK stated in its audit finding report. (DDTCNews)
PPPK Explains the Urgency of Regulating Tax Consultant Offices
The Directorate of Financial Profession Development and Guidance (Pembinaan dan Pengawasan Profesi Keuangan/PPPK in Indonesian) of the Ministry of Finance (MoF) is of the view that regulation concerning tax consulting firms should also be included in the Minister of Finance Regulation (MoF Reg.) 55/2026.
Ririn Septiani, Head of the Financial Profession Guidance Working Team at PPPK of the MoF, said that regulation relating to these firms is, in fact, already a common practice in other professions. "This is actually a common practice for professions such as public accountants, actuaries and appraisers. In fact, when they provide their services, they are required to do so through an office," said Ririn.
Unlike public accountants and appraisers, tax consultants are not required to provide tax consulting services through an office. However, MoF Reg. 55/2026 includes provisions concerning tax consulting firms in cases where a tax consultant does indeed establish an office. (DDTCNews)
Taxpayers May Apply for Penalty Reduction on STP Issued Before 2026
Taxpayers may apply for the reduction or waiver of penalties stated in a notice of tax assessment (surat ketetapan pajak/SKP in Indonesian) and a notice of tax collection (surat tagihan pajak/STP in Indonesian) issued before 8 October 2026.
Pursuant to the Director General of Taxes' Decree No. KEP-239/PJ/2026, such an application may be submitted provided that the taxpayer pays the principal tax, tax liability and/or a portion of the related administrative penalty by 30 June 2027.
"Administrative penalties listed in notices of tax assessment, notices of land and building tax assessment, notices of tax collection, or notices of land and building tax collection, issued before 8 October 2026 and on the principal amount of taxes, tax liabilities and/or part of the relevant administrative penalties paid until 30 June 2027," reads the First Dictum letter e of KEP-239/PJ/2026. (DDTCNews)
Government Yet to Discuss 2027 Personal Tax Relief Threshold
Coordinating Minister for Economic Affairs, Airlangga Hartarto, has disclosed that the government has not yet determined the 2027 personal tax relief (penghasilan tidak kena pajak/PTKP in Indonesian) threshold. Previously, he had raised the idea of adjusting the personal tax relief in line with inflation developments from next year onwards.
"It has not been discussed further (the personal tax relief threshold)," said Airlangga.
Previously, Deputy Minister of Finance, Juda Agung, stated that the government is conducting an in-depth study to determine the most optimal level of increase to the personal tax relief.
The government needs to balance the policy's benefits for the public against the potential fiscal consequences that may arise. (Kontan)
Pursuing Tax Targets, House: Digital Economy Potential to Be Optimised
Commission XI member of the House of Representatives, Mulyadi, is of the view that tax potential exploration needs to be directed towards the ever-growing digital economy. He stated that businesses within the digital ecosystem and the creative economy hold tax potential that has not yet been fully tapped.
In his view, the tax authority needs to factor in new economic activity developments when formulating its revenue-securing strategy. "There are a great many talents conducting business in the digital ecosystem. That represents new revenue potential. These creative economy and all manner of activities must be explored," he claimed.
Mulyadi made these remarks amid the Directorate General of Taxes' (DGT) need to pursue the remaining tax revenue target of approximately IDR750 trillion. Up to September 2026, tax revenue was recorded at IDR1,607.6 trillion, or 68.2% of the 2026 state budget target of IDR2,357.7 trillion. (DDTCNews) (dik)