New Electronic Tax Invoice System Implemented in Indonesia
In an effort to streamline tax administration and increase transparency, the Indonesian government has implemented a new electronic tax invoice system for all VAT-registered businesses (PKPs). The system, known as e-Faktur or e-Tax invoice, requires businesses to prepare and submit their tax invoices electronically.
The implementation of this new system began in Bali on July 1, 2015, and has now been extended to all PKPs across Indonesia as of July 1, 2016. This means that businesses in Sumatra, Kalimantan, Sulawesi, Nusa Tenggara, Papua, and Maluku are now required to comply with the e-Faktur system.
The e-Faktur system aims to simplify the tax reporting process for businesses and improve tax compliance. It eliminates the need for manual paper-based invoices and replaces them with electronic invoices that are generated and submitted through an online portal.
Under the new system, businesses are required to generate their tax invoices electronically using the e-Faktur application provided by the Indonesian Tax Office. The application allows businesses to input the necessary invoice details, such as the buyer’s and seller’s information, invoice date, and invoice amount. Once the invoice is generated, it is assigned a unique e-Faktur number and a QR code for verification purposes.
Businesses are then required to submit their e-Faktur invoices to the Tax Office through the online portal. The Tax Office will validate the invoices and issue a Tax ID Number (NPWP) to the buyer. This process ensures that the invoices are properly recorded and can be easily audited by the Tax Office.
The implementation of the e-Faktur system has several benefits for businesses. Firstly, it reduces the risk of errors and fraud in tax reporting. The electronic system automatically checks for errors and inconsistencies in the invoice data, minimizing the possibility of mistakes. Additionally, the system provides a secure and traceable record of all transactions, making it easier for businesses to track their sales and purchases.
Furthermore, the e-Faktur system improves efficiency in tax administration. With the electronic submission of invoices, the Tax Office can process and verify the data more quickly, reducing the time and resources required for manual processing. This allows the Tax Office to identify potential tax evasion more effectively and take appropriate actions.
The e-Faktur system also benefits the government by increasing tax compliance and revenue collection. By requiring businesses to submit their invoices electronically, the Tax Office can monitor transactions in real-time and detect any discrepancies or underreporting of sales. This helps to ensure that businesses are paying the correct amount of taxes and contributes to the government’s efforts in reducing the tax gap.
To facilitate the transition to the e-Faktur system, the Indonesian Tax Office has provided guidance and support to businesses. They have conducted training sessions and workshops to educate businesses on the new system and assist them in the implementation process. Additionally, the Tax Office has established a dedicated helpdesk to address any queries or issues that businesses may encounter.
Overall, the implementation of the e-Faktur system marks a significant step towards modernizing tax administration in Indonesia. By adopting electronic tax invoices, the government aims to improve efficiency, increase transparency, and enhance tax compliance. As businesses across the country adapt to this new system, it is expected to have a positive impact on the economy and contribute to the overall development of the nation.
