The government, on 31 December 2019, enacted the Minister of Finance Regulation No. 231/PMK.03/2019 concerning Procedures for the Registration and Cancellation of Taxpayer Identification Numbers, Confirmation and Revocation of Taxable Persons for VAT Purposes, as well as Tax Withholding and/or Collection, Remittance, and Reporting for Government Agencies (MoF Reg. 231/2019).
The Director General of Taxes, through the regulation, ex officio cancels the Taxpayer Identification Number (Nomor Pokok Wajib Pajak/NPWP) and/or revokes the Taxable Persons for VAT Purposes (Pengusaha Kena Pajak/PKP) confirmation of expenditure treasurers, revenue treasurers, and/or village treasurers. The cancellation of NPWP and revocation of PKP for government treasurers are carried out because they will be replaced by the issuance of new NPWP for all government agencies and/or the confirmation of government agency PKP. This implies that currently, NPWP and PKP on behalf of government treasurers no longer exist, but have instead been changed to be on behalf of government agencies.
To support the implementation of the provisions under MoF Reg. 231/2019, the Director General of Taxes has released the Director General of Taxes Regulation No. PER-02/PJ/2021 concerning Procedures for the Granting and Use of Government Agency Organizational Subunit Identity Numbers and Government Agencies’ Tax Reporting Obligations (PER-02/2021).
On another note, the regulation, taking effect from 18 February 2021, has been released to render convenience, simplicity, and certainty of tax law for government agencies with many implementing units thereunder in implementing tax rights and/or fulfilling tax obligations. This pertains to the government agencies’ authority to delegate part of the authority for managing state or regional finances to the implementing units thereunder to take actions resulting in expenditures borne by the government expenditure and/or revenues, including to collect and remit taxes.
Through PER-02/2021, the Director General of Taxes affirms that all Government Agencies are required to register at the Tax Office (Kantor Pelayanan Pajak/KPP) or Tax Services, Dissemination, and Consultation Office (Kantor Pelayanan, Penyuluhan, dan Konsultasi Perpajakan/KP2KP) whose working area includes the government agencies’ domicile according to actual conditions. The registration renders the granting of a government agency NPWP. In addition to registering independently, the Directorate General of Taxes may issue NPWP ex officio for government agencies as per statutory provisions in the field of taxation, based on data and/or information owned or obtained by the Directorate General of Taxes (DGT).
NPWP, either obtained through registration or ex officio, shall be used by budget users/proxy of budget users, payment order signatory officials, expenditure treasurers, revenue treasurers, and/or heads of village government financial affairs in implementing the rights and obligations of Government Agencies as tax withholding agents and/or collectors. This regulation also emphasizes that government agencies that have been given an NPWP, either through registration or ex officio, are obliged to carry out tax rights and/or obligations to the KPP where said government agencies are registered.
Fulfillment of tax obligations includes reporting on tax withholding and/or collection and remittance. The reporting of tax withholding and/or collection and remittance by government agencies is carried out using: Periodic Article 21 and/or Article 26 Income Tax Returns; Unification Periodic Tax Returns of government agencies; and/or Periodic VAT Returns for government agency PKP. However, in the event that the reporting application of Periodic Article 21 and/or Article 26 Income Tax Returns of government agencies and Unification Periodic Tax Returns of government agencies is not yet available, the reporting will continue to employ Periodic Tax Returns as per statutory provisions in the field of taxation.
Further, in the event that an agency gives authority to an implementing unit thereunder to take action and be accountable for the receipt of government revenues and/or expenditure borne by the expenditure budget, said government agency may appoint the implementing unit as an organizational subunit. Such organizational subunit may be appointed to exercise certain tax rights and obligations for and on behalf of the government agency.
Nevertheless, the responsibility for the implementation of tax rights and/or fulfillment of tax obligations by the organizational subunit remains with government agencies. In further detail, certain tax rights and obligations carried out by the organizational subunits include:
tax withholding and/or collection;
the electronic issuance, correction, and/or cancellation of tax withholding and/or collection slips;
recording of tax invoice data received from partners and tax payment slips (Surat Setoran Pajak/SSP) on the collection of VAT and Sales Tax on Luxury Goods (STLGs);
establishment of billing codes and payment transactions or tax remittance via receiving banks and receiving post offices;
submission of requests for overbooking for errors in tax payment or remittance made by organizational subunits performing the remittance; and/or
the implementation of rights and/or fulfillment of other tax obligations as stipulated by the Director General of Taxes which are carried out electronically.
Government agencies must register organizational subunits to the DGT to enable these organizational subunits to exercise certain rights and obligations. Registration is conducted online via the webpage provided by the DGT. Based on the registration, the DGT will issue the Organizational Subunit Identity Number.
The Organizational Subunit Identity Number consists of 19 digits. The first 15 digits represent the 15 digits of the government agency’s NPWP, whereas the next four digits represent sequence codes. Government agencies may change the organizational subunit data online. The data changes are made in the event of any changes in name, address, person in charge/leadership, and/or the number of organizational subunits.