Overview

As discussed in the first part of this two-part edition of Indonesian Law Digest (“ILD”) on the Bill on the Harmonization of Taxation Regulations (“Bill”), six main areas are covered under this new omnibus law[1], specifically: 1) General taxation provisions and procedures (ketentuan umum dan tatacara perpajakan – “KUP”); 2) Income tax (pajak penghasilan – “PPh”); 3) Value-added tax (pajak pertambahan nilai – “PPN”); 4) The Taxpayer Voluntary Disclosure Program; 5) Carbon tax; and 6) Excise.[2] In essence, the new arrangements set under the Bill are expected to narrow the budget deficit and increase the overall tax ratio. Ultimately, it is hoped that these measures will establish a stable economy characterized by steady sustainable economic growth within Indonesia.[3]