Decree on Effective Validity of the DGT’s Vertical Agency Reforms

s Denny Vissaro
s Hamida Amri Safarina
By Denny Vissaro, Hamida Amri Safarina
Denny Vissaro
Hamida Amri Safarina
The government has amended the provisions on the organization and work procedures of the Directorate General of Taxes’ (DGT) vertical agencies. The amendments are outlined in the Minister of Finance Regulation No. 184/PMK.01/2020 concerning Amendments to the Minister of Finance Regulation No. 210/PMK.01/2017 concerning the Organization and Work Procedures of Vertical Agencies of the Directorate General of Taxes (MoF Reg. 184/2020).
 
The government, through MoF Reg. 184/2020, has updated the duties, functions, organizational structure, nomenclature, working areas, and types of Tax Offices (Kantor Pelayanan Pajak/KPP). The reforms are aimed at optimizing tax revenues through efficient, effective tax administration, with integrity and justice, as well as realizing a reliable organization.
 
In terms of the provisions on renewal under MoF Reg. 184/2020, the Director General of Taxes has released a decree concerning the effective implementation time for the reforms of the organization, work procedures, location, and work area of ​​the DGT’s vertical agencies.
 
The decision concerning the effective validity is outlined in the Director General of Taxes Decree No. KEP-28/PJ/2021 concerning the Organization, Work Procedures, and Commencement of Operation of the Directorate General of Taxes’ Vertical Agencies as stipulated in the Minister of Finance Regulation No. 184/PMK.01/2020 concerning Amendments to the Minister of Finance Regulation No. 210/PMK.01/2017 concerning the Organization and Work Procedures of Vertical Agencies of the Directorate General of Taxes (KEP-28/2021).
 
In essence, through KEP-28/2021, the Director General of Taxes has decided to implement reorganization in the form of changes in duties, functions, organizational structures, nomenclature, working areas, and types of Tax Offices (Kantor Pelayanan Pajak/KPP) in the DGT’s vertical agencies formerly regulated under MoF Reg. 184/2020. effective from 3 May 2021.
 
In further detail, this decree, taking effect from 5 February 2021 stipulates the provisions on the effective validity of the reorganization related to the changes in duties, functions, organizational structure, nomenclature, working areas, and types of Tax Offices in 4 dictums.
 
The first dictum, outlines that the implementation of the duties, functions, and/or organizational structure of the DGT’s vertical agencies based on MoF Reg. 184/2020 both at the Tax Offices and Tax Services, Dissemination, and Consultation Service Offices (Kantor Pelayanan, Penyuluhan, dan Konsultasi Perpajakan/KP2KP) will begin on 3 May 2021.
 
The second dictum, specifying 15 of the DGT’s vertical agencies subject to changes in nomenclature or naming. The fifteen agencies consist of one Regional Office, 11 Tax Offices, and three KP2KPs. The vertical agencies subject to changes in nomenclature will operate from 3 May 2021.
 
These nomenclature changes were formerly outlined in the Appendix of MoF Reg. 184/2020. Details of the list of the DGT’s vertical agencies subject to nomenclature changes can be seen in Table 1.
 
Table 1 Details of Changes in the Names of the DGT’s Vertical Agencies
Source: MoF Reg. 210/2017; MoF Reg. 184/2020; and KEP-28/2021.
 
The third dictum, specifying which DGT’s vertical agencies have experienced changes in working areas. 27 Tax Offices and one KP2KP have been subject to changes in their respective working areas. The new working areas will effectively operate on 3 May 2021. Details of the new working areas of several DGT’s vertical agencies are also outlined in the Appendix of MoF Reg. 184/2020.
 
In further detail, the 28 DGT vertical agencies subject to changes in their working areas include: West Medan Small Tax Office, Bandar Lampung One Small Tax Office, Bandar Lampung Two Small Tax Office, Bengkulu One Small Tax Office, Bengkulu Two Small Tax Office.
 
Further, Jakarta Gambir One Small Tax Office, Jakarta Tamansari Small Tax Office, Jakarta Setiabudi Three Small Tax Office, Jakarta Kebayoran Baru One Small Tax Office, Jakarta Kebayoran Baru Two Small Tax Office, Jakarta Cakung Small Tax Office, and Jakarta Tanjung Priok Small Tax Office.
 
Next, Tigaraksa Small Tax Office, Kosambi Small Tax Office, Bandung Tegallega Small Tax Office, Bandung Cicadas Small Tax Office, Karawang Small Tax Office, North Bekasi Small Tax Office, West Bekasi Small Tax Office, Pondok Gede Small Tax Office, Cibinong Small Tax Office, and Ciawi Small Tax Office.
 
In addition, there are also Central Semarang Small Tax Office, Kebumen Small Tax Office, Surabaya Mulyorejo Small Tax Office, Gresik Small Tax Office, and Banjar Small Tax Office. On the other, KP2KP that has undergone regional changes is Namlea KP2KP.
 
The fourth dictum, specifies which DGT vertical agencies have experienced changes in the types of Tax Offices. 18 Small Tax Offices have been changed to Medium Tax Offices. The vertical agencies that experienced this type of change will also start operating on 3 May 2021. These changes have rendered a current number of 38 Medium Tax Offices. This is in line with the number of Medium Tax Offices stated in Article 81 of MoF Reg. 184/2020.
 
Formerly, under MoF Reg. 210/2017 the number of Medium Tax Offices was 29. However, the 29 Medium Tax Offices under MoF Reg. 210/2017 still includes nine Special Tax Offices which constitutes the same type as Medium Tax Offices.
 
MoF Reg. 184/2020, on the other hand, has segmented Special Tax Offices into a separate type of Tax Office. This implies that MoF Reg. 184/2020 adds 18 Medium Tax Offices and further details are confirmed in KEP-28/2021. Details of the Small Tax Offices which have been changed into Medium Tax Offices can be seen in Table 2.
 
Table 2 Details of Changes in the Types of Tax Offices
Source: MoF Reg. 210/2017; MoF Reg.  184/2020; and KEP-28/2021.