Indonesia's Tax Authority Expands Collection Powers

Seizing Shares of Tax Defaulters

Indonesia's Directorate General of Taxes (DJP) has announced plans to seize and sell shares belonging to tax defaulters as part of its enhanced collection efforts. This new measure targets individuals and corporations with significant stock holdings in the Indonesian capital market. The decision represents a significant expansion of the tax authority's powers to collect outstanding tax debts.

Rationale Behind the New Measure

According to Rosmauli, Director of Counseling, Service, and Public Relations at DJP, many taxpayers hold substantial assets in the form of securities and shares in the capital market. These assets can be of significant value, making them a logical target for tax collection when necessary. The DJP justifies this move by stating that tax collection should be carried out against the legal assets of tax debtors.

Implications for Investors

This development has important implications for investors holding shares in the Indonesian capital market. Shareholders with tax arrears now face the risk of having their investments seized by tax authorities. The move is likely to prompt investors to ensure compliance with their tax obligations to avoid potential enforcement actions.

Implementation and Future Outlook

While specific details about the implementation timeline remain limited, the announcement signals a more aggressive approach by Indonesian tax authorities to collect outstanding tax revenues. As the capital market continues to grow, the DJP's ability to target shareholdings represents a significant enhancement of their collection capabilities.