Up to 100% Tax Penalty Relief: DGT Braces for Coretax Surge
JAKARTA, DDTCNews - The Directorate General of Taxes (DGT) is strengthening the capacity of the coretax administration system to anticipate a surge in users ahead of the expiry of the utilisation period of the reduction or nullification of administrative tax penalties (penghapusan sanksi administratif pajak/PSA in Indonesian) of up to 100% on 31 December 2026. This topic is among the reviews covered by national media today, Thursday (22/10/2026).
The DGT's Director of Tax Dissemination, Service and Public Relations, Inge Diana Rismawanti, said the tax authority is continuously monitoring system performance and strengthening the capacity of the coretax network throughout the duration of the penalty relief programme.
"The DGT is continuously monitoring and strengthening the coretax system to anticipate increased access ahead of the deadline for the 100% reduction or nullification of administrative penalties for taxpayers wishing to apply for the PSA, particularly through to December 2026," she said.
Inge urged taxpayers not to wait until close to the deadline before applying for the reduction or nullification of administrative penalties. Earlier submission via coretax is expected to facilitate a smoother process whilst reducing the risk of an access backlog as the deadline approaches.
Taxpayers are also encouraged to promptly fulfil the tax obligations required to take advantage of these facilities, including settling the outstanding principal tax liability and filing tax returns (surat pemberitahuan/SPT in Indonesian) pursuant to the applicable provisions.
"The DGT is committed to maintaining system reliability and continues to conduct evaluations to improve the quality of services to taxpayers," Inge affirmed.
For information, the government grants the reduction or nullification of tax administrative penalties of up to 100% through the Minister of Finance Regulation (MoF Reg.) 71/2026 and the Director General of Taxes Decision No. KEP-239/PJ/2026.
Under KEP-239/PJ/2026, the extent of the reduction or nullification of penalties granted varies according to the type of penalty and the timing of the fulfilment of tax obligations.
Penalties eligible for reduction or nullification of up to 100% include fines for late filing of tax returns, interest on tax underpayment arising from amendment of a tax return and interest on late payment or remittance of tax.
However, the utlisation of these facilities must still satisfy the prescribed requirements. Taxpayers must, for example, settle the outstanding principal tax liability or file a tax return no later than 31 December 2026, pursuant to the provisions applicable to each facility. See DGT Nullifies Tax Administrative Penalties up to 100%
On a separate occasion, DDTC Consulting Managing Partner, David Hamzah Damian, highlighted the potential for technical difficulties with coretax, given that the period for utilising the 100% administrative penalty nullification is relatively short. In his view, the DGT needs to anticipate the possibility of an access surge when taxpayers only fulfil their tax obligations close to the deadline.
David considers that the DGT also needs to prepare alternative scenarios should coretax experience disruptions as the deadline approaches. This is important to provide certainty to taxpayers who need to settle their tax obligations or file their tax returns to utilise the reduction or nullification of administrative penalties facility.
"Indonesians like to leave things to the last minute, so on 31 December 2026, they'll only think about it at 11 o'clock at night. Then coretax goes down. What is the DGT's fallback scenario if coretax is down? Does this qualify as force majeure or can the tax return be filed manually?" he said.
In addition to this news, there is a review of the government's resumption of VAT on domestic economy-class airline tickets during the Christmas and New Year holiday period. There is also a discussion regarding the decline in the local tax ratio.
Here is the full review of the tax articles.
DGT Continues to Monitor and Evaluate Coretax
The DGT will continuously review coretax performance throughout the administrative tax penalty reduction or nullification programme. Inge stated that the review activities aim to detect and address technical disruptions to coretax as swiftly as possible.
"Should any issues arise, remedial action will be taken according to the type of disruption, accompanied by technical coordination and the provision of information to taxpayers through DGT's official channels," she said.
In addition to conducting reviews, the DGT also evaluates every issue that occurs on Coretax. This is intended to ensure that issues are addressed appropriately and that tax administration services can be restored promptly. (DDTCNews)
Government Bears VAT on Christmas & New Year Air Tickets
The government is again bearing value added tax (VAT) on domestic economy-class air tickets during the Christmas and New Year (Natal dan tahun baru/Nataru in Indonesian) holiday period pursuant to MoF Reg. 77/2026.
Referring to MoF Reg. 77/2026, the government-borne VAT incentive is provided at 100%. TThe government-borne VAT is the VAT payable on the base fare and fuel surcharge. This incentive is provided to maintain people's purchasing power and stimulate the economy during the Nataru holiday period.
The government-borne VAT incentive is granted for the ticket purchase period commencing 20 October 2026 through to 10 January 2027. However, the government-borne VAT incentive is only granted for the domestic economy-class flight period of 20 October 2026 through to 10 January 2027. (DDTCNews, Kontan, Bisnis Indonesia)
Ministry of Industry Initiates Tax Incentives for Hybrid Vehicles
The Ministry of Industry (Kementerian Perindustrian/Kemenperin in Indonesian) has revealed that the government is opening the door to providing tax incentives for vehicles using hybrid, plug-in hybrid electric vehicle (PHEV) and range-extended electric vehicle (REEV) technologies.
Minister of Industry, Muhammad Sarmuji, stated that the tax incentives for hybrid, PHEV and REEV vehicles would be designed differently from those that have thus far been provided for fully battery-powered electric vehicles. "The tax relief need not be identical. What matters is that there are incentives to enable the industry to grow. Because the benefits are felt equally by both the public and the country," he said.
On the other hand, he continued, the government is also promoting the granting of non-fiscal incentives for hybrid, PHEV and REEV vehicles, including administrative facilitation, exemption from odd-even traffic restrictions and the provision of dedicated parking facilities. (DDTCNews, Bisnis Indonesia)
Local Tax Ratio Falls to 1.12% in 2025
The National Development Planning Ministry/National Development Planning Agency (Badan Perencanaan Pembangunan Nasional/Bappenas in Indonesian) has recorded that the local tax ratio (LTR) fell to 1.12% in 2025.
This figure is lower than the achievements recorded in 2023 and 2024, which both reached 1.22%. Bappenas Director of Governance, Local Finances and Transfers to Regions, Anang Budi Gunawan, stated that the decline in the LTR in 2025 is a matter of concern for the government, particularly in the effort to achieve the local tax ratio target set out in the National Medium-Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional/RPJMN in Indonesian) 2025–2029 of 1.45%.
Anang also emphasised that improving the LTR should not be interpreted solely as an effort to raise tax rates. Local governments need to broaden the tax base, improve taxpayer compliance, enhance tax administration and promote formal and productive economic activity. (DDTCNews)
BI Rate Maintained at 5.75%
Bank Indonesia (BI) maintains its reference interest rate, or BI rate, at 5.75% at the board of governors' meeting (rapat dewan gubernur/RDG in Indonesian) held on 20–21 October 2026. Nevertheless, BI decided to raise the deposit facility interest rate to 5%.
Meanwhile, the lending facility interest rate remains at 6.5%. BI Governor, Destry Damayanti, stated that the central bank is also strengthening a number of policy instruments to maintain rupiah stability and attract foreign capital inflows.
"The monetary policy remains consistent with the strategy of stabilising the rupiah exchange rate amidst increasingly strong external pressures, and with efforts to maintain the achievement of the inflation target of 2.5% plus or minus 1% in 2026 and 2027," she said. (DDTCNews, Kontan, Bisnis Indonesia) (dik)