Purbaya to Revise Restitution Rules: Effective in Preventing State Leaks?
Jakarta, CNBC Indonesia - The government plans to implement the latest tax restitution regulations. The stricter policy on tax overpayment refunds for businesses is scheduled to take effect on 1 May 2026.
The draft regulation includes provisions on the timeframe for processing applications, namely a maximum of three months for Income Tax and one month for Value Added Tax since the application is received.
Tax consultant from Botax Consulting Indonesia, Raden Agus Suparman, assesses that if the government sets a very short restitution period without changing the internal business processes at the Directorate General of Taxes (DJP), the target of reducing restitution leaks will be difficult to achieve.
This is because tax restitution has so far proceeded through two channels. First, through preliminary refunds based on administrative review. Second, through tax audits that take longer.
According to him, the preliminary refund channel can indeed be completed in a short time by regulation. However, in practice, there are many internal stages before the funds actually enter the taxpayer’s account.
“The one-month period is for the review procedure. Before the review, there is the procedure for issuing the Official Note (ND) until the review assignment is issued. After the SKPKPP is issued, there is also an administrative procedure between the KPP and KPPN. The timeframe can be two or three months,” Raden told CNBC Indonesia on Wednesday (15/4/2026).
“If the audit procedure is carried out, it will take even longer. The internal DJP process until the SP2 is issued often takes time,” he said.
Not only that, accelerating restitution does not automatically close tax leak gaps. In fact, if done without risk mapping, it could potentially loosen supervision.
He suggests that the DJP rely on the Compliance Risk Management (CRM) system to sort taxpayers based on compliance levels. Low-risk taxpayers can receive fast restitution, while those with a red report card must be examined more thoroughly.
“Accelerated restitution can only be given to taxpayers who, according to the CRM audit machine, have a compliant taxpayer label. Even if necessary, restitution is given directly to taxpayers who have no CRM red flags and no indications of non-compliance,” he said.
“On the other hand, for taxpayers with high-risk CRM audit indications, a comprehensive examination must be carried out, all taxes and complete examination. Thus, the examination period could reach six months,” he added.
Tax observer from the Center for Indonesia Taxation Analysis (CITA), Fajry Akbar, said the main issue currently is not acceleration, but concerns that the restitution process will be slowed down or complicated.
If that happens, the impact could spread to production, goods prices, and national economic growth.
“Company liquidity is disrupted, the production process will be disrupted, company output will be disrupted, and aggregately it will disrupt economic growth,” Fajry told CNBC Indonesia on Wednesday (15/4/2026).
“Or, companies will raise prices to get instant cash flow. This happens in the field, especially if the non-direct VAT tax restitution process is delayed. Consumers have to bear the increase,” he said.
Fajry highlighted that tax restitution issues are often complained about by foreign investors. According to him, the slowness of tax refund processing makes Indonesia less competitive compared to neighbouring countries like Vietnam.
He explained that in Vietnam, the preliminary restitution scheme with the concept of refund first, audit later for VAT can be completed in just six days. Meanwhile, general restitution is processed in about 40 days.
“No wonder investors choose to invest in Vietnam. So, tax issues are largely not related to rates but other things that make us less competitive compared to Vietnam and others,” he said.