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Today's Headlines Tax

  • Indonesian Cigarette Producers Face New Tobacco Excise Tax Hike

    Indonesian Cigarette Producers Face New Tobacco Excise Tax

    At the start of 2018 the Indonesian government will again raise the excise tax on tobacco products (including cigarettes) in Indonesia. The tax will be raised by an average of 10.04 percent, effective per 1 January 2018. Traditionally, the government hikes the tobacco excise tax once per year in search of more tax revenue and to discourage consumption of tobacco products.

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  • Indonesia Investigates Standard Chartered's "Guernsey Transfer"

    Indonesia Investigates Standard Chartered's "Guernsey Transfer"

    Indonesian authorities are currently investigating a suspicious transfer, involving USD $1.4 billion, by Standard Chartered Plc made in late-2015. British multinational banking and financial services company Standard Chartered held these funds - the majority on behalf of Indonesian clients - at Guernsey, a Channel Islands in the English Channel near the French coast.

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  • How Much Worth of Products Can I Bring into Indonesia Duty-Free?

    How Much Worth of Products Can I Bring into Indonesia Duty-Free?

    Those Indonesians (as well as expats living in Indonesia) who enjoy visiting places like Singapore for some quick shopping will be happy to learn that the Indonesian government decided to raise the maximum value of private goods - purchased overseas - that can be carried into Indonesia free of import duties and tax.

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  • Upstream Textile Industry of Indonesia Requests Tax Exemption

    Upstream Textile Industry of Indonesia Requests Tax Exemption

    The upstream textile industry of Indonesia urges the Fiscal Policy Office (in Indonesian: Badan Kebijakan Fiskal, or BKF) to exempt local raw materials - supplied by local manufacturers - from VAT. Redma Gita Wirawasta, Secretary General of the Indonesian Synthetic Fiber Producers Association (APSyFI), said he has discussed this proposal during several recent meetings with the BKF.

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  • Indonesian Gov't Plans Excise Tax on Plastic Bags in 2018 Budget

    Indonesian Gov't Plans Excise Tax on Plastic Bags in 2018 Budget

    Stakeholders in Indonesia's plastics industry are not happy to see the government eager to impose an excise tax on plastic bags in the proposed 2018 state budget. Fajar Budiyono, Secretary-General of the Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas), is against the excise tax saying it will not be a solution to environmental pollution. Instead, the government should focus on enhancing plastic waste treatment.

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  • Automotive Industry: Indonesia Plans to Cut Tax for Sedan Sales

    Automotive Industry: Indonesia Plans to Cut Tax for Sedan Sales

    For several years stakeholders in Indonesia's automotive industry urged the government to cut taxes on sedan sales. Finally, the government seems willing to alter its policies. The sedan is categorized as a luxury good, implying it is subject to an additional 30-40 percent luxury goods tax. This makes the sedan vehicle more expensive compared to other car types and therefore there exists less demand for the Indonesian-made sedan, both on the domestic market and international market.

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  • Facebook to Open Limited Liability Company in Indonesia

    Facebook to Open Limited Liability Company in Indonesia

    Leading American online social media and social networking service Facebook will open a permanent business entity (a foreign limited liability company, in Indonesian: perseroan terbatas penanaman modal asing, or PT PMA) in Indonesia later this month. The move is in line with Indonesian government requests. Earlier, Facebook only operated a representative office in Jakarta.

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Latest Columns Tax

  • Government to Revise Indonesia's Tobacco Excise Tax Policy

    Government to Revise Indonesia's Tobacco Excise Tax Policy

    Every year Indonesia's Tax Office adjusts the excise tax on tobacco products. The adjustment is always made in consideration of the central government's tax revenue targets as well as the input of specific stakeholders (including pro-health lobby groups, or groups that defend the interests of tobacco manufacturers or farmers).

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  • Electronic Tax Payments Re-regulated by Indonesian Tax Authority

    Electronic Tax Payments Re-regulated by Indonesian Tax Authority

    Recently, the Director General of Taxes (DG Tax) issued regulation number PER-05/PJ/2017 concerning Electronic Tax Payments (New Regulation). The New Regulation replaces DG Tax regulation number PER-26/PJ/2014 (Old Regulation), which also regulated electronic tax payments. The New Regulation aims to simplify the procedures for electronic payments which pertain to tax payments in US Dollar and administration of land and building taxes.

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  • Google & Indonesia Agree on Tax Settlement after Long Dispute

    Google & Indonesia Agree on Tax Settlement after Long Dispute

    Although the amount remains a secret, the government of Indonesia and Alphabet's Google finally managed to reach an agreement on the tax settlement after a long dispute that started in mid-2016. The news was confirmed by Indonesian Finance Ministry Sri Mulyani Indrawati. The dispute started because Indonesian authorities felt the so-called "over-the-top content" giants, referring to those companies that deliver content through Internet, deliberately did not set up permanent establishments in Indonesia in order to avoid taxes. Besides Google, other examples are Yahoo, Facebook and Twitter.

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  • Minimum Threshold for Indonesia's "Bank Openness Law" Revised

    Minimum Threshold for Indonesia's "Bank Openness Law" Revised

    The government of Indonesia listened to the criticism that emerged after it decided to set a rather low threshold for bank accounts that are to become subject to the automatic bank information exchange program. Through Finance Ministry regulation PMK No. 70/PMK.03/2017 Indonesia's tax authorities obtain access to information on accounts held at financial institutions, including bank accounts. This new regulation makes it possible to check whether tax payers indeed fulfill their tax obligations.

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  • Which Bank Accounts Are Checked by Indonesia's Tax Authorities?

    Which Bank Accounts Are Checked by Indonesia's Tax Authorities?

    There exists some resistance against the Indonesian government's recently announced regulation that gives tax authorities access to information on accounts held at financial institutions, including bank accounts. The regulation aims to contribute to a more transparent financial system as well as to boost the government's tax revenue realization (tax evaders will need to be more careful now authorities can monitor private and corporate bank accounts).

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  • Indonesia's Tax Authorities Can Monitor Taxpayers' Bank Accounts

    Indonesia's Tax Authorities Can Monitor Taxpayers' Bank Accounts

    Indonesia's Tax Office now has more power to check whether people and companies indeed pay taxes. Last week the Indonesian government basically scrapped the existence of banking data secrecy by introducing a new regulation that gives the nation's tax authorities access to information on accounts held at financial institutions, including bank accounts. The new regulation should contribute to a more transparent financial system and boost the government's (much-need) tax revenue realization. However, Indonesian parliament still needs to approve the new regulation.

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  • Tax Amnesty Program Indonesia Ended, What Are the Results?

    Tax Amnesty Program Indonesia Ended, What Are the Results?

    Indonesia's tax amnesty program ended on 31 March 2017, so now it is time to take a look at the results. Although Indonesia's amnesty program has been labelled as one of the most - if not the most - successful amnesty programs ever around the globe (in terms of asset declarations), there is plenty of room for disappointment. Based on data from Indonesia's Tax Office, less than one million Indonesians joined the program. For many nations this would be a great number. For Indonesia this number means tax evasion remains rampant, implying the government misses out on much-needed tax revenue.

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  • Indonesia's Tax Amnesty Program to End Soon, Any Structural Impact?

    Indonesia's Tax Amnesty Program to End Soon, Any Structural Impact?

    Indonesia's tax amnesty program will end soon. The nine-month program was designed to finish on 31 March 2017. Although the program has become the world's most successful tax amnesty program, it will fail to solve Indonesia's tax revenue collection problems. And with tax revenue being the largest source for public spending capacity, low tax compliance in Southeast Asia's largest economy obstructs more rapid development of the Indonesian economy.

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  • Budget Deficit of Indonesia Under Control Thanks to Tax Amnesty

    Budget Deficit of Indonesia Under Control Thanks to Tax Amnesty

    Indonesia's budget deficit in 2016 is estimated to have reached 2.46 percent of the nation's gross domestic product (GDP), below the government's forecast of 2.7 percent of GDP and at a safe distance from the legal cap of 3.0 percent of GDP that is stipulated by Indonesian law. This is a positive matter that is supported by modestly growing tax revenue. In full-year 2016 tax revenue realization reached IDR 1,105.2 trillion (approx. USD $83 billion), only 81.6 percent of the target that was set in the Revised 2016 State Budget (APBN-P 2016) but slightly higher than tax revenue realization in the preceding year.

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  • Indonesia's Tax Amnesty Program: Calls for Celebration or Pessimism?

    Indonesia's Tax Amnesty Program: Calls for Celebration or Pessimism?

    After the Constitutional Court had already confirmed earlier this week that Indonesia's tax amnesty program is not in violation of the nation's constitution, there occurred a second reason for celebration related to the tax amnesty program: the total of declared assets up to Wednesday (14/12) had surpassed the government's target of IDR 4,000 trillion (approx. USD $301 billion), about 3.5 months before the end of the program. Despite this success there remains reason for pessimism.

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