Law No. 7 of 2021 on the Harmonization of Tax Regulations

Summary

Law 7/2021 (the HPP Law) amends several tax laws at once: general tax provisions and procedures (KUP), income tax, value added tax (VAT, or PPN) and excise, and introduces a voluntary disclosure program and a carbon tax. Its aim is fiscal consolidation: broadening the tax base, improving administration and increasing voluntary compliance.

For businesses, the Law matters because it changes the income tax and VAT rules applied day to day, including integration of the NIK (national identity number) as the individual taxpayer number (NPWP). Implementing rules on income tax include PP 55/2022. Detailed technical rules sit in government regulations (PP) and Minister of Finance regulations (PMK), so the latest versions should always be checked.

Key points for investors

• Basis for many tax rate and administration changes since 2022.
• Reference for VAT, corporate income tax and taxable entrepreneur (PKP) obligations.
• Technical rules are in PP and PMK; always check the latest version at pajak.go.id.

Status & related regulations

Amended by

• UU No. 6 Tahun 2023

Amends

• UU No. 2 Tahun 2020
• PERPU No. 1 Tahun 2020
• UU No. 42 Tahun 2009
• UU No. 16 Tahun 2009
• UU No. 36 Tahun 2008
• UU No. 39 Tahun 2007
• UU No. 11 Tahun 1995
• UU No. 8 Tahun 1983
• … and 2 more (see JDIH BPK)

Related at IzinBeres

• NIB & OSS business licence
• Read in Bahasa Indonesia
• All regulations in the library

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