Tax collection is a series of actions so that tax bearers pay off their tax debt. Tax collection can be done in various ways, such as reprimanding or warning, carrying out immediate and total tax collection, notifying a distress warrant, suggesting prevention, carrying out confiscation, carrying out hostage-taking, and even selling goods that have been confiscated.

Tax collection is aimed at taxpayers whose taxes are still owed and have not been paid. This step is one of the steps to optimize tax revenues through an intensification scheme.

Tax collection is carried out by appointed officials and carried out based on the tax collection procedures regulated in the Minister of Finance Regulation (PMK). The latest tax collection procedures currently in effect are PMK Number 61 of 2023.

PMK Number 61 of 2023 was passed with the aim of providing justice, legal certainty, and benefits in the implementation of tax collection actions and laws and regulations in the field of tax collection. Previously, tax collection procedures were regulated in PMK Number 189/PMK.03/2020.

However, PMK Number 189/PMK.03/2020 is considered to require improvement considering that there are adjustments to provisions regarding tax collection assistance in accordance with Law Number 7 of 2021 concerning Harmonization of Tax Regulations. In this way, the government re-arranged the provisions on tax collection procedures in PMK Number 61 of 2023 and revoked 3 previously applicable regulations, namely:

1. Minister of Finance Decree Number 85/KMK.03/2002;
2. PMK Number 23/PMK.03/2006; And
3. PMK Number 189/PMK.03/2020.

New Provisions for Tax Collection Procedures

In accordance with the consideration point, one of the new provisions in PMK Number 61 of 2023 regulates tax collection assistance with partner countries or partner jurisdictions. The provisions are regulated in Chapter VII and are derivative regulations from Article 20A of the KUP Law and Article 48 of Government Regulation Number 55 of 2022.

Procedures for tax collection assistance with partner countries or partner jurisdictions are regulated in Articles 78 to Article 131 and Article 145 of PMK Number 61 of 2023. Apart from that, the government has also added provisions for support for implementing tax collection actions in Article 146 of PMK Number 61 of 2023. Previously, provisions for tax collection assistance with partner country governments or partner jurisdictions were regulated in Article 77 to Article 79 PMK Number 189/PMK.03/2020.

However, there are several changes to the tax collection procedures according to PMK Number 61 of 2023. These changes include adding, clarifying, simplifying and deleting provisions previously regulated in PMK Number 189/PMK.03/2020.

New provisions for tax collection procedures added in PMK Number 61 of 2023 include:

1. Increase the authority of the Minister of Finance to appoint other officials for central tax collection;
2. Increase the authority of officials to resubmit requests for notification of the balance of assets stored in the Tax bearer’s Financial Account number in the event that it is discovered that the balance of the Tax bearer’s assets is less than the Tax Debt and Tax Collection Costs;
3. Adding a provision that the bailiff can request assessment assistance from the Tax Assessor in estimating the value of the confiscated tax;
4. Adding carbon tax as a type of tax for which tax debts must be paid and tax collection actions can be taken;
5. Adding specifications to the criteria for individual tax bearers, especially for heir, heirs, guardians for minor children, and guardians for people under guardianship. This is regulated in Article 8 PMK Number 61 of 2023;
6. Adding specifications to the criteria for corporate tax bearers, especially in terms of provisions for tax bearers for corporate taxpayers who have branches and corporate tax payers in government agency work units. This is regulated in Article 9 PMK Number 61 of 2023;
7. Adding exception criteria to the provisions on the order of tax bearers for Corporate Taxpayers, namely in the case of:
   - Immediate and total tax collection actions are carried out; And
   - There are signs that the Tax bearer will stop or reduce company activities or work carried out in Indonesia
   
   
8. Adding criteria for the contents of an order to carry out confiscation in Article 20 paragraph (6) PMK Number 61 of 2023;
9. Adding motorized vehicles, yachts and airplanes to the list of objects subject to confiscation of movable goods;
10. Regulates certain circumstances which result in immovable property being confiscated prior to confiscation of movable property, namely if the movable property is not found or the movable property found has no value or the price is inadequate compared to the tax debt;
11. Adding another place for storing confiscated goods in the event that according to the bailiff the confiscated goods must be kept in the office of an official or other place, namely the office of the local regional government official who is a witness in the implementation of the confiscation and the State Storage House for Confiscated Goods.
12. Adds two specific conditions for the lifting of confiscation, namely in the case of:
    a. Confiscated goods sold at auction or not at auction are not sold and the Official obtains other goods with a value at least equal to the Tax Debt and Tax Collection Costs; and/or
    b. The Taxpayer has received a decision to approve the Tax payment installments for the Tax Debt which is the basis for the Confiscation.
    
    
13. Adding two specific conditions for lifting the block, namely in terms of:
    a. The Taxpayer has received a decision on approval for installments of Tax payments for Tax Debts, and/or
    b. Blocking has been carried out which exceeds the amount of Tax Debt and Tax Collection Fees
14. Adding provisions for blocking procedures in order to carry out confiscation of securities as regulated in Articles 43, 44 and 45 PMK Number 61 of 2023;
15. Adding provisions on procedures for confiscating securities that are not traded on the Capital Market, Receivables and Equity Participations, which are regulated in Articles 48 and 49 PMK Number 61 of 2023;
16. Adding provisions on procedures for carrying out sales, both by auction and sales that are not carried out by auction, which are regulated in Articles 51, 52 and 53 PMK Number 61 of 2023;
17. Adding provisions for procedures for submitting documents related to tax collection, which are regulated in Articles 133 to Article 138 PMK Number 61 of 2023.

Apart from that, PMK Number 61 of 2023 also clarifies several provisions that had previously been regulated. Regarding the term "approaching the tax collection expiry", this regulation regulates the term more clearly as "expiry in less than 2 (two) years". This rule also clarifies the criteria for employees who can receive notification of distress warrant for Corporate Taxpayers, namely permanent employees which include company employees in charge of finance, bookkeeping, taxation, personnel, public relations, or general affairs and not daily employees.

More specific provisions are also regulated in relation to the criteria for the regional government as the party receiving the distress warrant in the event that the notification cannot be implemented. The Regional Government as intended is at least at the level of Subdistrict Secretary or Village Secretary. Apart from that, the government also regulates other ways to announce distress warrant namely through the official website of the Directorate General of Taxes or other sites appointed by officials.

There are several simplified provisions, namely:

1. Simplify the provisions on certain conditions for confiscation revocation, especially in Article 26 paragraph (2) letter b; Article 38 paragraph (2) letter c; Article 47 paragraph (2) letter b PMK Number 61 of 2023;
2. Simplify the provisions for lifting blocks, especially in Article 33 paragraph (1) letters b and c PMK Number 61 of 2023;
3. Simplify the provisions for consideration of collection revocation, especially in Article 62 paragraph (2) letter b PMK Number 61 of 2023;
4. Simplify the provisions for certain considerations regarding the release of tax bearers who are held hostage, especially in Article 73 paragraph (2) letter a PMK Number 61 of 2023.

Furthermore, several provisions that were removed in the billing procedures according to PMK Number 61 of 2023 include:

1. Eliminate the issuance of immediately and total tax collection orders within the scope of tax collection actions in this rule, previously regulated in Article 4 paragraph (1) letter h PMK Number 189/PMK.03/2020;
2. Remove provisions on procedures for submitting blocking requests, previously regulated in Article 29 PMK Number 189/PMK.03/2020; And
3. Remove the provisions for the transfer of the Tax bearer's assets if after 14 (fourteen) days have passed since the confiscation the tax bearer  has not paid off the tax debt and tax collection costs, previously regulated in Article 42 PMK Number 189/PMK.03/2020.