Indonesia to Review Ultimum Remedium Principle in Tax Regulations

Evaluation of Current Tax Policies

Finance Minister Purbaya Yudhi Sadewa has announced plans to evaluate the application of the ultimum remedium principle in handling excise tax violations. This legal principle emphasizes that criminal sanctions should be used as a last resort, prioritizing state loss recovery and administrative resolution before imposing criminal penalties. The review aims to ensure that the current implementation doesn't inadvertently encourage repeated offenses.

Background of Ultimum Remedium

The ultimum remedium principle is a fundamental concept in criminal law that suggests criminal sanctions should be the ultimate measure after exhausting other resolution methods. In the context of excise tax regulations, this principle guides how violations are handled by authorities. The Finance Minister expressed his intention to study whether this principle is regulated through laws or ministerial regulations during a press conference on January 8, 2026.

Implications of the Evaluation

The planned evaluation has significant implications for Indonesia's tax enforcement landscape. By reviewing the current application of ultimum remedium, the government aims to create a more balanced approach between punitive measures and administrative resolutions. This could potentially lead to changes in how tax violations are handled in the future, particularly in the excise sector.