Executive Summary

Key insights and market outlook

The Indonesian government has introduced new tax compliance regulations through Finance Ministerial Regulation (PMK) No. 111/2025, effective January 1, 2026. The regulation enhances tax monitoring mechanisms including requests for information, warnings, and tax audits. This move aims to improve tax compliance in Indonesia's self-assessment tax system by providing a stronger legal framework for the Directorate General of Taxes (DJP). The new rules cover various taxes including Income Tax (PPh), Value Added Tax (PPN), and Luxury Goods Sales Tax (PPnBM).

Full Analysis

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Deep Dive Analysis

Indonesia Implements Enhanced Tax Compliance Monitoring

New Regulatory Framework for Tax Oversight

The Indonesian government, led by Finance Minister Purbaya Yudhi Sadewa, has issued Finance Ministerial Regulation (PMK) No. 111/2025 ¹

²³, marking a significant development in the country's tax administration. This regulation, effective from January 1, 2026, aims to strengthen tax compliance monitoring mechanisms in Indonesia's self-assessment tax system. The new rules provide a comprehensive framework for tax oversight, including requests for information, warnings, reprimands, and tax audits ¹.

Scope of Tax Monitoring

The regulation covers various aspects of tax compliance, including monitoring of registered and unregistered taxpayers as well as regional tax compliance ¹

. The Directorate General of Taxes (DJP) is empowered to conduct comprehensive oversight of tax obligations, covering multiple tax types such as Income Tax (PPh), Value Added Tax (PPN), Luxury Goods Sales Tax (PPnBM), Stamp Duty, Land and Building Tax, and Carbon Tax ¹.

Rationale and Implementation

The introduction of PMK No. 111/2025 is grounded in the need for fairness and legal certainty in tax compliance monitoring ³

. As Indonesia operates a self-assessment tax system where taxpayers are responsible for calculating, paying, and reporting their own taxes, effective monitoring is crucial. The new regulation is seen as a step towards enhancing taxpayer compliance while maintaining the integrity of the tax system.