OVERVIEW

Just as a car needs gasoline, so a state needs income in order to run a nation. To do this, a government relies on taxes, as well as other types of income known as non-tax state revenue (penerimaan negara bukan pajak – “PNBP”). Both revenue sources are acknowledged under Article 23A of the Indonesian Constitution,[1] which sets out the government’s authority to issue a number of laws and regulations through which it can realize this mandate.

The legal framework for tax is mainly regulated under Law No. 6 of 1983 on General Taxation Provisions and Procedures, which has been amended four times, most recently by Law No. 16 of 2009. PNBP is regulated by Law No. 20 of 1997 on PNBP (“1997 PNBP Law”) and has not been either amended or revised since it came into force almost two decades ago.