The harmonized tax law amends the provisions relating to excise – Tax
Indonesia: Harmonized tax law amends excise provisions
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The new law n ° 7 of 2021 of October 29, 2021 relating to the harmonization of tax regulations (the “Harmonized tax law“) amends several existing regulations on tax law and introduces several new regulations. Since the harmonized tax law adopts the Omnibus types (Law No. 11 of 2020 of November 2, 2020 on the creation of jobs), its coverage includes the following elements: Tax provisions (Ketentuan Umum Perpajakan), Income taxes (Pajak Penghasilan), Value added taxes (Pajak Pertambahan Nilai), Voluntary Disclosure Program (Pengungkapan Sukarela Program), carbon taxes and excise duties. This Newsflash explains the changes relating to Excise.
The Harmonized Tax Law amends several provisions of Law No. 11 of 1995 of December 30, 1995 on Excise as last amended by Law No. 39 of 2007 of August 15, 2007 (the “Excise duty“).
Below we present the summary of the salient provisions of the harmonized tax law relating to the excise law:
The harmonized tax law adds electronic cigarettes to excise goods. Electronic cigarettes are included in the tobacco products group. The previous provisions only considered (i) cigarettes, (ii) cigars, (iii) sliced tobacco and (iv) and other tobacco products as excise tobacco products. The explanation in Article 4 further explains that electronic cigarettes are tobacco products in liquid, solid or other forms, resulting from the processing of tobacco leaves, served to end consumers and consumed by electric heating. .
- The expansion of the powers of customs and excise officers
Under the Harmonized Tax Law, customs and excise officers are authorized to conduct investigations into any alleged infringements in the excise sector. If the result of a search proves that an alleged violation in the excise sector is an administrative violation, then that violation will be subject to administrative penalties.
- Cessation of Excise Crime Investigations
The termination of investigations of excise-related criminal acts was previously regulated without any delay after a request from the Minister or the Attorney General. In the Harmonization of Tax Law, the cessation must be effected within 6 (six) months of the date of a letter of request made by the Minister or the Attorney General. The Harmonized Tax Law also stipulates that cessation cannot be effected in relation to any criminal offense under Articles 50, 52, 54, 56 and 58 of the Excise Law after the party concerned has paid the administrative penalties for ‘an amount of 4 (four) multiplied by the value of excise supposedly paid. If a criminal case has been transferred to a court, the defendant can pay administrative penalties and this will be a consideration to be prosecuted without imprisonment.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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