Indonesia Strengthens Tax Crime Enforcement through Supreme Court Regulation

Comprehensive Framework for Tax Law Enforcement

The Indonesian Supreme Court (MA) has issued Regulation No. 3/2025, establishing a comprehensive framework for handling tax crime cases. This regulation represents a significant step in strengthening tax law enforcement in Indonesia by granting broader powers to investigators and clarifying legal procedures ¹

Key Provisions of the New Regulation

1. Asset Seizure Authority: Investigators can now seize financial records, documents, and other evidence related to suspected tax crimes even before a suspect is officially identified ¹
   Source 1

   https://nasional.kontan.co.id/news/ma-terbitkan-aturan-baru-penegakan-hukum-pajak-kian-diperketat
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   https://nasional.kontan.co.id/news/aturan-ma-penyitaan-aset-pajak-bisa-dilakukan-tanpa-tetapkan-tersangka
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2. Non-Replaceable Tax Fines: The regulation explicitly states that tax fines cannot be replaced with imprisonment, making monetary penalties mandatory ³
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   https://nasional.kontan.co.id/news/aturan-baru-bikin-denda-pajak-wajib-dibayar-dan-tak-ada-pengganti-kurungan
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3. Leniency for Tax Debt Repayment: Defendants who settle their tax debts and administrative penalties at various stages of the legal process may receive reduced sentences or even exemption from imprisonment ⁵
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   https://nasional.kontan.co.id/news/keringanan-hukuman-pidana-pajak-jika-utang-lunas
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4. Standardized Procedures: The regulation aims to standardize tax crime handling procedures across Indonesia's judicial system ²
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   https://nasional.kontan.co.id/news/aturan-baru-ma-soal-pidana-pajak-penerimaan-negara-diharap-meningkat
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Impact on Tax Compliance and State Revenue

The new regulation is expected to have multiple impacts on Indonesia's tax landscape:

1. Enhanced Deterrence: Stricter enforcement and broader investigative powers are likely to deter tax evasion
2. Increased State Revenue: More effective collection of tax fines and penalties could boost state revenue
3. Improved Compliance: Clearer guidelines may encourage voluntary tax compliance
4. Legal Certainty: Standardized procedures provide greater legal certainty for taxpayers and authorities

Expert Commentary

Tax experts view the regulation as a significant development in Indonesia's tax enforcement landscape. Raden Agus Suparman from Botax Consulting Indonesia notes that the regulation emphasizes restoring state losses through tax payments as the primary objective ⁶