Finance Ministry Raises Tax Penalty Interest Rates for July 2026

The Directorate General of Economic and Fiscal Strategy (DJSEF) at the Ministry of Finance has set new administrative sanction interest rates for the July 2026 period, including the monthly compensation interest rate. These administrative sanction and compensation interest rates are adjusted periodically each month.

Under Minister of Finance Decree Number 29 of 2026, signed by DJSEF Director of Economic Stabilisation Strategy Noor Faisal Achmad on behalf of the Minister of Finance, the administrative sanction interest rates and monthly compensation interest rates for July 2026 have increased compared to the June 2026 period.

For instance, the administrative sanction interest rate for late tax payments after the issuance of a Tax Underpayment Assessment Letter (SKPKB) or other relevant documents, as stipulated in Article 19 paragraph 1 of the KUP Law, has risen to 0.58% per month from the previous 0.56% in KMK 25/2026.

“Stipulating the monthly interest rate as the basis for calculating administrative sanctions in the form of interest and providing interest compensation, effective from 1 July 2026 to 31 July 2026,” as quoted from KMK 29/2026 on Thursday (2/7/2026).

Furthermore, the administrative sanction interest rate for the deferral or instalment of tax payments stipulated in Article 19 paragraphs 2 and 3 of the KUP Law has also been set at 0.58% in KMK 29/2026, up from the previous 0.56%.

Similarly, the administrative sanction interest rate for the disclosure of inaccuracies in a tax return (SPT) after an audit, as regulated in Article 8 of the KUP Law, has also been increased to 1.42% from the previous rate of just 1.39%.

As for the monthly compensation interest rate for delays in refunding overpaid tax (Article 11 paragraph 3 of the KUP Law), delays in issuing a tax overpayment assessment letter (Article 17 B paragraph 3 of the KUP Law), and the refund of overpaid tax due to the granting of an objection, appeal, or judicial review, it has risen to 0.58% from the previous 0.56%.

As is known, this monthly interest rate serves as the basis for calculating administrative sanctions in the form of interest and providing interest compensation to taxpayers. This interest rate aims to improve taxpayer compliance and align with the provisions of Law Number 6 of 1983 concerning General Provisions and Tax Procedures (KUP Law), as amended by Law Number 7 of 2021 concerning Harmonisation of Tax Regulations (HPP).