In Law Number 7 of 2021 concerning Harmonization of Tax Regulations (UU HPP) Chapter on Amendments to the Law on General Provisions and Tax Procedures it is stated that the population identification number (NIK) in the identity card (KTP) will be integrated with the taxpayer identification number (NPWP).
Article 2 paragraph (1a) of the HPP Law states that the NPWP as referred to in paragraph (1) for individual taxpayers who are Indonesian residents uses a NIK. In addition, it is also stated in Article 2 paragraph (10), namely in the context of using NIK as NPWP as referred to in paragraph (1a), the minister who carries out domestic government affairs provides population data and data returned from users to the Minister of Finance to be integrated with the database. taxation.
The question people ask is why should NIK be integrated with NPWP? What is the legal basis for implementing the integration of NIK and NPWP? What are the benefits and expected results?
Integration Deployment Driver
The first reason is the low tax ratio and high shadow economy. According to the World Bank report (2020) ‘Public Expenditure Review: Spending for Better Results’, Indonesia’s tax ratio was recorded at 10.2%, which is one of the lowest among developing countries.
Meanwhile, to deal with the shadow economy, strategies are needed as stated in the Strategies of tax administrations to tackle the shadow economy (Shining Light on the Shadow Economy: Opportunities and Threats, OECD 2017) namely the use of data, effective identification and registration, and a holistic approach from the government.
The second reason is tax data support for government policy determination. The Covid-19 pandemic has forced the government to provide a fast, effective, and efficient response in the form of policies. As we all know, the government through the Directorate General of Taxes (DGT) provides various incentives and facilities for taxpayers so as to encourage national economic recovery.
The third reason is that the data integration condition is not optimal. The level of pairing of NIK and NPWP is still low because there is no solid taxation database yet. This can be found in the Report on the Implementation of the National Strategy for Prevention of Corruption in Quarter VII of 2020, the National Secretariat for the Prevention of Corruption.
Legal Basis
Regulation of the President of the Republic of Indonesia Number 83 of 2021 concerning Inclusion and Utilization of Population Identification Numbers and/or Taxpayer Identification Numbers in Public Services states that the integration of population databases with the tax administration system aims to facilitate individual taxpayers carry out the fulfillment of tax rights and obligations. For the government, the integration of NIK and NPWP can create administrative simplicity and can be used for the national interest.
The use of NIK as NPWP does not necessarily cause every individual to pay taxes. Tax payments are made if the annual income is above the PTKP limit or gross circulation is above Rp500 million/year for entrepreneurs who pay 0.5% Final PPh (PP-23/2018).
Regulations on the use of NIK as an Individual NPWP in Article 2 paragraph (4) include a. requirements for additional NIK and/or NPWP of service recipients; b. the inclusion of the NIK and/or NPWP of service recipients; c. validation of the inclusion of NIK and/or NPWP; d. matching and updating of Population Data and taxation databases; and e. supervision. The service in question is all public services.
Article 4 states that the addition or inclusion of a NIK and/or NPWP as referred to in Article 3 is carried out with the following provisions: a. NIK as an identity marker for individuals who do not have an NPWP; b. NIK and NPWP as identity markers for individuals who already have NPWP; and c. NPWP as an identity marker for entities and foreigners who do not have a NIK.
The Ministry of Home Affairs through the Directorate General of Population and Civil Registration as referred to in Article 5 paragraph (1) letter a is responsible for the accuracy and validity of NIK-based Population Data. (2) The Ministry of Finance through the Directorate General of Taxes as referred to in Article 5 paragraph (1) letter b is responsible for the accuracy and validity of the TIN
Benefits and Results
The benefits of applying NIK as a NPWP include supporting the use of a standardized and integrated identity number in the form of a NIK as a SIN (Single Identification Number) as well as a unique data identity reference and as a reference code in public services to support the national database policy (one Indonesian data).
SIN integrates financial and non-financial data that can support data availability so as to facilitate taxpayers in fulfilling their tax administration, as well as being a test tool to ensure the correct implementation of taxpayers’ tax rights and obligations. The integration of the national database ensures data governance that supports the planning, implementation, evaluation and control of government programs and policies while still taking into account the guarantee of data security.
The expected outcome is of course the target of state revenue can be achieved due to the increase in potential income tax, both extensification and intensification based on NIK-based transactions and expansion and improvement of the integrity of the tax database.
Long term administrative burden is expected to be reduced because SIN will be the primary key in every service for the Indonesian population. NIK is connected to many government services such as health, education, business permits, and other services so that the analysis in the context of providing facilities is more comprehensive.
Sumber https://www.pajak.go.id/id/artikel/penerapan-nik-sebagai-identitas-perpajakan