Tax Court‘s Future: Centralisation or Decentralisation?
JAKARTA, DDTCNews - The idea of decentralising the Tax Court has resurfaced amidst efforts to strengthen access to justice and improve the effectiveness of tax dispute resolution. The topic featured among the reviews in national media today, Thursday (5/11/2026).
The Supreme Court (Mahkamah Agung/MA in Indonesian) is pushing for decentralisation of the Tax Court, either through the establishment of tax courts in the regions or through integration into the state administrative court (tata usaha negara/TUN in Indonesian) system. According to SC TUN Chamber Supreme Court Justice Yodi Martono Wahyunadi, decentralisation of the Tax Court is necessary to strengthen access to justice and support a one-roof system.
"Why is court decentralisation needed? It is to realise access to justice and to strengthen the one-roof system. It is also for case efficiency," he said.
Yodi noted that tax cases are currently handled in a centralised manner by the Tax Court located in Jakarta. Tax court decisions are final and have permanent legal force, with no cassation legal remedy available.
As a result, many tax court decisions are subject to civil review (peninjauan kembali/PK in Indonesian) applications to the SC without passing through the cassation stage as a filter. This situation also increases the burden of handling tax civil review cases at the SC.
In light of this situation, the SC is pushing for decentralisation of the Tax Court, supplemented by room for parties to file cassation appeals against decisions relating to tax cases.
Should decentralisation be pursued through the establishment of tax courts in the regions, the SC would need to establish new judicial bodies in a number of areas. According to Yodi, their establishment could be carried out in stages, taking into account budget availability.
If Tax Court decentralisation is pursued through integration into regional TUN high courts, tax cases would be handled by a specialised tax chamber within the TUN high courts.
"The first model is as an independent institution. The tax court continues to exist, but its structure is split across several regions. In the second model, the tax court merges into the regional TUN high courts," Yodi explained.
According to Yodi, the advantage of decentralisation through the establishment of regional tax courts is the preservation of judicial specialisation in taxation. However, that option is viewed as requiring a large budget.
Conversely, integrating the Tax Court into TUN high courts is seen as more efficient because the MA would not need to construct new buildings in the regions. However, that option risks reducing technical specialisation in taxation and adding to the caseload within the TUN judicial system.
In response to the SC's proposal, the Directorate General of Taxes (DGT) is of the view that tax dispute resolution is more effectively carried out in a centralised manner by the Tax Court in Jakarta. Director General of Taxes Bimo Wijayanto said tax disputes need to be handled in Jakarta given that 55.8% of appeals and lawsuits to the Tax Court are filed by taxpayers domiciled in Jakarta.
"Some 55% of cases are in Jakarta. So, in the current context, trials in Jakarta are more efficient and more effective," said Bimo.
The majority of tax appeal and lawsuit applications are submitted by taxpayers located in Jakarta, as Jakarta currently retains its status as both the business centre and the seat of government.
Even where taxpayers have business activities in the regions, including outside Java, most taxpayers choose to centralise their financial and taxation functions in Jakarta.
In addition to that news, there is a review of the agreement between Indonesia and Singapore to follow up on the issues of misinvoicing and transfer pricing. There is also a discussion of the various VAT facilities for the PFII zone.
Below is a full review of taxation articles.
e-Tax Court to Broaden Access to Justice
The DGT considers that the centralisation of tax dispute handling in Jakarta does not impede access for taxpayers in the regions to obtain justice over tax disputes. Even where a taxpayer is located outside Jakarta, the taxpayer may file an appeal against the disputed object and participate in trials electronically using the e-tax court.
"Today, 96% of cases go through the e-tax court. This means supports a simple, swift and low-cost judicial process. There is no need for planes, buses, trains or any other vehicles. Everything can be done through the e-tax court," said Bimo.
Further, Article 4 of the Tax Court Law also permits trials to be held outside the court's domicile. At present, trials outside the domicile may be conducted in Yogyakarta and Surabaya. (DDTCNews)
DGT Urges Taxpayers Not to Fear Receiving an SP2DK
The DGT has reiterated its appeal to taxpayers not to be concerned upon receiving a letter of inquiry (surat permintaan penjelasan atas data dan/atau keterangan/SP2DK in Indonesian) from local tax officers.
Bimo said the SP2DK is a follow-up to data and information received by the DGT from various institutions. For reference, the DGT is known to have issued 539,733 SP2DKs to taxpayers up to 27 October 2026.
"We have been working with almost all data providers [including] ministries, institutions, associations and local governments. So why are we being complained about by the public for sending so many SP2DKs? There is no need to be afraid," said Bimo. (DDTCNews)
RI–Singapore Agree to Follow Up on Transfer Pricing and Misinvoicing
Bimo revealed that Indonesia has revealed that Indonesia has reached an agreement with Singapore to follow up on misinvoicing and transfer pricing issues.
He said both issues have become a concern for Indonesia and Singapore. The two countries consider that addressing them is necessary to achieve fairness in taxation and equitable tax competition.
"There is goodwill on the part of the Singapore Prime Minister to discuss 3 matters. First, a joint resolution regarding forest and land fires. Second, transfer pricing. Third, misinvoicing. These have become bilateral issues, framed in terms of tax fairness and equitable tax competition," said Bimo. (DDTCNews)
MoF States Tax Holiday Facilities to Be Discontinued
The Directorate General of Economic and Fiscal Strategy (Direktorat Jenderal Strategi Ekonomi dan Fiskal/DJSEF in Indonesian) of the Ministry of Finance (MoF) has stated that the government will not extend the tax holiday facilities regulated under MoF Reg. 69/2024.
DJSEF Senior Fiscal Policy Analyst, Melani Dewi Astuti, said the tax holiday incentive is not aligned with the global minimum tax (GMT) provisions and therefore its provision will not be extended. Under MoF Reg. 69/2024, proposals for the tax holiday incentive must be submitted no later than 31 December 2025.
"What is the future of the tax holiday? For now, it will not be extended because all incentives are fundamentally compatible [with the GMT] except for the tax holiday," she said. (DDTCNews, Bisnis Indonesia)
Government Extends VAT Not Collected Facilities to IIFC Areas
The government is providing value added tax (VAT) not collected incentive at the Indonesia International Financial Centre (IIFC). The facility is granted through Law 6/2026.
The VAT not collected facility shall be granted to imports as well as supplies of certain strategic taxable goods and/or taxable services. The goods and/or services in question relate to the construction and development needs of the IIFC.
"The value added tax not collected facility..., shall be granted: a. supplies of certain strategic taxable goods and/or taxable services, and/or b. imports of certain strategic taxable goods," reads Article 57 paragraph (1) of Law 6/2026. (DDTCNews)
Minister for MSMEs Clarifies Issue of Tax on Barbers
The Minister for Micro, Small and Medium Enterprises (MSMEs), Maman Abdurrahman, has affirmed that micro entrepreneurs with a turnover of up to IDR500 million per year, including barbers and masseurs, will not be subject to tax.
Maman made the statement to clarify remarks by the Presidential Special Envoy for Climate and Energy, Hashim Djojohadikusumo, regarding the imposition of tax on various types of informal occupations, such as barbers and masseurs. He said Hashim's remarks need to be understood in full, as the government has already provided an income tax exemption facility for individual taxpayers who conduct business with a maximum turnover of IDR500 million per year.
"There is no tax levy, and tax incentives have even been issued for those whose annual turnover is IDR500 million. That is roughly IDR40 million per month. No tax is levied on that. The tax rate is 0%. Clear," he said. (DDTCNews, Kontan, Bisnis Indonesia) (dik)