Page 3 - Newsletter (Tax Relaxation of Luxurious Housing, Control of Local Tax, and Restructuring of Tax Authority)

DDTC Newsletter Vol.01 | No.09 I June 2019 Page 3 of 7

Tax Relaxation of Luxurious Housing, Control of Local Tax, and
Restructuring of Tax Authority

Control of Taxation Aspect for the The documents of DTH and RTH should be submitted
Expenditures Sourced from the Local through SKID on a monthly basis no later than the 20 th
Government Budget after the relevant month ends. If the deadline falls on a
holiday or a non-working day, DTH and RTH should be
submitted no later than the following working day. This
The Ministry of Finance has issued a new regulation
regulation stipulates that the failure to report DTH and
regarding the mechanism to supervise the taxation
RTH may result in the Minister of Finance delaying the
aspect for expenditure sourced from the Regional Budget.
distribution of revenue sharing fund (dana bagi hasil/
This provision clarifies the imposition of penalties if
the power of the regional general treasurer (bendahara DBH) or general allocation fund (dana alokasi umum/
DAU) amounting to a maximum of 50% for the following
umum daerah/BUD) is not in accordance with the
month or period.
administrative aspect. This provision is regulated in the
Minister of Finance Regulation Number 85/PMK.03/2019 The re-distribution of the delayed DBH or DAU will be
(MoF Regulation No. 85/2019) concerning the Control carried out by the Minister of Finance after the Proxy
Mechanism for the Withholding and Deposit of Taxes on of BUD has submitted DTH and RTH. The delay and
Expenditure Sourced from the Regional Budget. distribution are stipulated in the Minister of Finance
Decree signed by the Director General of Fiscal Balance
This latest regulation concerning regional taxes revokes
on behalf of the Minister of Finance.
the Minister of Finance Regulation Number 64/
PMK.05/2013 (MoF Regulation No. 64/2013) concerning The control mechanism that comprises a test on the
the Control Mechanism for the Withholding and Deposit accuracy of the calculation and deposit of the tax is
of Taxes Conducted by the Treasurer of Expenditure of then carried out by the Tax Office (Kantor Pelayanan
Local Government Work Unit/Proxy of Regional General Pajak/KPP). The accuracy test is conducted through the
Treasurer. Furthermore, this regulation shall come into calculation of the tax potential on regional expenditure,
force 60 days since its promulgation on 31 May 2019. DTH prepared by the Treasurer of Expenditure of SPKD,
DTH prepared by the Proxy of of BUD, RTH prepared
One of the objectives underlying the issuance of
by the Proxy of of BUD, and the Proof of State Revenue
this regulation is to encourage compliance with the
(Bukti Penerimaan Negara/BPN).
withholding and deposit of taxes on expenditures sourced
from the Regional Budget and the submission of the
List of Daily Transactions of the Regional Expenditure/
Recapitulation of Daily Transactions of the Regional Changes in the Layers of Customs
Expenditure. In addition, this policy aims to adjust Administrative Sanctions
the supervision mechanism for electronic payments
conducted by the regional government. The government has increased the number of layers for
the imposition of customs administrative sanctions for
In this regulation, the Directorate General of Taxes
businesses responsible for the underpayment of import
(DGT) involves the Directorate General of Fiscal Balance
duties and export duties. The addition of the layers is
in disseminating information to the Treasurer of
Expenditure of Local Government Work Unit (Satuan contained in the Government Regulation Number 39 of
Kerja Perangkat Daerah/SKPD), Budget User (Pengguna 2019 (Government Regulation No. 39/2019) concerning
Anggaran/PA)/Budget User Proxy (Kuasa Pengguna the Amendments to Government Regulation Number
28 of 2008 (Government Regulation No. 28/2008)
Anggaran/KPA), and Proxy of Regional General
concerning the Imposition of Administrative Sanctions
Treasurer (Bendahara Umum Daerah/BUD) in terms of
in the Form of Fines in the Customs Sector. The latest
the supervision/withholding and deposit of taxes that regulation classifies the scheme of fine imposition into
the DGT conducts. ten layers whereas the previous regulation stipulated
five layers with the highest sanctions fixed at 1,000%.
Furthermore, this regulation states that the Proxy of
BUD must submit the List of Daily Transactions (Daftar Based on the previous five-layer requirement, the
Transaksi Harian/DTH) of the Regional Expenditure and imposition of the 1,000% sanction was relatively
the Recapitulation of Daily Transaction (Rekapitulasi convenient while the imposition of sanctions in the
Transaksi Harian/RTH) of the Regional Expenditure form of administrative fines is, in essence, intended to
along with the information in the Regional Financial result in a deterrent effect and not to generate revenue.
Information System (Sistem Informasi Keuangan Daerah/ The implementation of the Government Regulation
SIKD) table used as the basis for DTH submitted to the No. 39/2019 is further expected to encourage the
Directorate General of Fiscal Balance. compliance of business players. The following table
shows the comparison of layers for sanctions pertaining