Executive Summary

Key insights and market outlook

Indonesia's Directorate General of Taxes (DJP) and Ministry of Cooperatives have partnered to accelerate NPWP registration for Red and White Village Cooperatives (KDKMP) through a new cooperation agreement ¹

². This initiative aims to integrate tax registration systems and enhance compliance among the approximately 83,000 cooperatives ². The move is part of a national strategy to formalize these cooperatives and improve tax revenue.

Full Analysis

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Deep Dive Analysis

Indonesia Streamlines Tax Registration for Village Cooperatives

Enhanced Collaboration Between Tax Authority and Cooperative Ministry

The Directorate General of Taxes (DJP) under the Ministry of Finance and the Ministry of Cooperatives have signed a Memorandum of Understanding (MoU) to expedite the registration process for Red and White Village Cooperatives (KDKMP) to obtain Taxpayer Identification Numbers (NPWP). This strategic partnership aims to enhance tax compliance among these cooperatives by integrating their registration systems ¹

².

Key Elements of the Cooperation Agreement

The cooperation agreement, signed by DJP Director General Bimo Wijayanto and Deputy for Cooperatives Institutional and Digital Affairs Henra Saragih, covers several key areas:

Data Exchange and Utilization: Both institutions will share data to streamline the registration process and improve tax compliance.
Socialization and Education: Joint efforts will be made to educate cooperatives about tax obligations and benefits of formal registration.
Other Collaborative Activities: Additional initiatives may be undertaken to support the integration and compliance goals.

National Context and Implications

This initiative is part of a broader national strategy to formalize approximately 83,000 Red and White Village Cooperatives across Indonesia ²

. By enhancing their tax compliance, the government aims to increase tax revenue while supporting the development of these cooperatives. The program is also aligned with Presidential Instruction No. 9/2025, which focuses on accelerating the establishment of village cooperatives.

Expected Outcomes

The integration of tax registration systems is expected to simplify the registration process for KDKMP, making it easier for them to comply with tax regulations. This, in turn, is likely to increase tax revenue for the government and promote a more organized cooperative sector.

References