The Indonesian Directorate General of Taxes (DGT) has issued Regulation No. PER-19/PJ/2025 concerning Deactivation of Access for the Creation of Tax Invoices for Taxable Entrepreneurs Who Fail to Fulfil Their Obligations under Tax Regulations (PER-19). The regulation aims to strengthen legal certainty and promote taxpayer compliance through a digital mechanism.
Under this new framework, the DGT can systematically deactivate e-Faktur (the e-invoicing system) access for non-compliant taxpayers that:
Fail to withhold or collect taxes for three consecutive months;
Fail to submit the annual income tax return (SPT Tahunan PPh);
Fail to submit VAT returns (SPT Masa PPN) for three consecutive months, or fail to submit for six VAT periods within one calendar year;
Fail to report withholding/collection slips (bukti potong/pungut) for three consecutive months; or
Have outstanding tax liabilities of at least:
IDR 250 million for taxpayers under the Pratama Tax Office; or
IDR 1 billion for taxpayers under the Madya or Large Tax Office
that have already been subject to a warning letter and have no valid instalment or deferral approval in effect.
If any of these conditions are met, the head of the tax office (KPP), through the mandate from the DGT, may deactivate the taxpayer’s e-invoicing access. Once it is deactivated, the taxpayer loses the ability to issue valid tax invoices, effectively suspending all VAT-able transactions.
PER-19 grants taxpayers the right to submit a written clarification to the KPP where they are registered. This clarification must follow the official format prescribed in the Appendix of PER-19 and be supported with relevant documentation. The head of the KPP must approve or reject the clarification submitted by the taxpayer within five working days from receipt of the letter. If the taxpayer still meets the criteria for deactivation after reactivation, the DGT may re-deactivate the e-invoicing access.
This regulation marks a clear shift from traditional/manual supervision to a data-driven, electronic compliance regime. However, the clarification process can be highly subjective and the burden of proof lies entirely on the taxpayer.
The implications of deactivation are material and extend beyond administrative inconvenience:
Taxpayers cannot issue valid tax invoices, making taxable supplies legally non-compliant;
Exposure to monthly interest penalties (up to 24 months) for delayed VAT payments; and
A potential penalty of 1% of the VAT base on the seller’s side for defective tax invoices.
In short, e-invoice deactivation is not a mere administrative pause – it carries financial and operational risks that can directly disrupt cash flow and compliance status. Therefore, taxpayers are expected to maintain well-organised, easily retrievable tax documentation to support any clarification request swiftly and effectively.
The regulation officially took effect on October 22 2025.
Government-borne VAT for domestic air travel during the year-end holidays
As the year-end holiday season approaches, the minister of finance has announced a new fiscal incentive aimed at easing travel costs and supporting the aviation industry through Regulation No. 71/2025. Through this, the government will bear some portion of the VAT (VAT DTP) on domestic commercial air transport services during the Christmas 2025 and New Year 2026 period.
Generally, the provision of air transport services is subject to 11% VAT. However, during the incentive period, passengers will pay only 5%, while the remaining 6% will be borne by the government as part of the 2026 State Budget.
Under this regulation, passengers flying economy class on domestic routes will enjoy partial VAT relief for tickets purchased between October 22 2025 and January 10 2026, with the flight taking place between December 22 2025 and January 10 2026. If a passenger buys a ticket outside these dates or travels in a different class, no government coverage applies.
Airlines must issue valid tax invoices or equivalent documents – including tickets or airway bills – and report the transactions in their monthly VAT returns (SPT Masa PPN). In addition, they are required to submit a detailed report of all VAT DTP transactions electronically via the DGT portal no later than April 30 2026. Failure to submit this report on time – or inaccuracies in reporting – will result in the revocation of the VAT DTP facility.
The regulation officially took effect on October 15 2025.
Government-borne Article 21 income tax for the tourism sector
To strengthen economic growth and job creation, the Ministry of Finance (MoF) has issued Regulation No. 72/2025 (PMK-72), which amends PMK No. 10/2025 regarding Article 21 Income Tax Borne by the Government (PPh 21 DTP). The amendment broadens the incentive coverage to include the tourism sector, marking a significant extension of the government’s 2025 fiscal stimulus programme.
Previously, the PPh 21 DTP facility was available only for employees in labour-intensive manufacturing industries such as textiles and garments. Through this new regulation, tourism businesses are also entitled to the same tax relief, recognising the sector’s vital role in Indonesia’s economy.
Under the scheme, employers continue to withhold Article 21 income tax from employee salaries as usual. However, the portion of the tax that qualifies will be borne by the government, not the employee.
PMK-72 also sets different incentive periods:
For manufacturing sectors, the Article 21 DTP applies from January to December 2025; and
For the tourism sector, it applies from October to December 2025, aligning with the peak holiday and travel season.
The regulation introduces new provisions regarding excess withholding and compensation. Generally, any overpaid PPh 21 DTP is not refundable. However, for tourism businesses, any excess amount not covered by the government may be refunded to employees or carried forward to the next tax period. To implement this, employers must prepare a calculation worksheet and an additional withholding slip in the prescribed format and submit both through the DGT portal.
Employers utilising this incentive are required to:
Pay the DTP amount directly to employees upon salary payment;
Exclude the DTP portion from taxable income; and
Report the utilisation in their monthly PPh 21/26 returns.
Non-compliance with reporting or documentation requirements may lead to revocation of the incentive.
Through PMK-72, the government reaffirms its commitment to supporting strategic sectors through targeted tax incentives.
The regulation officially took effect on October 28 2025.
Imposition of safeguard import duty on cotton yarn products
As a follow-up to the findings of the Indonesian Trade Safeguards Committee regarding a surge in imports of cotton yarn that has caused serious injury to the domestic industry, the government, through MoF Regulation (PMK) No. 67 of 2025 (PMK-67), has imposed a safeguard import duty (BMTP) on imports of cotton yarn. The regulation was promulgated on October 20 2025 and came into force on October 29 2025.
Imports of cotton yarn products falling under 27 tariff lines within headings 5204 (three tariff lines), 5205 (12 tariff lines), and 5206 (12 tariff lines) are subject to the BMTP when imported from countries other than the 120 listed in Annex B of PMK-67.
The BMTP tariff rates are:
No. | Year | Period | Tariff |
1 | First | For a period of one year, calculated from the effective date of this ministerial regulation. | IDR 7,500/kg |
2 | Second | For a period of one year, commencing after the end date of the first year. | IDR 7,388/kg |
3 | Third | For a period of one year, calculated from the end date of the second year. | IDR 7,277/kg |
