Legal Implications of Using National Identity Number
(Nomor Induk Kependudukan - NIK) as Taxpayer ID
(Nomor Pokok Wajib Pajak - NPWP) in the Indonesian Tax System
Yustinus Lambang Setyo Putro and Rio Christiawan
Program S3 Ilmu Hukum, Universitas 17 Agustus 1945 Jakarta, Indonesia
Keywords: National Identity Number, Taxpayer Identification Number, Tax Obligations, Indonesia Tax Law.
Abstract: Starting from January 1, 2024, Indonesian residents must use their National Identity Number (Nomor Induk
Kependudukan - NIK) for tax-related transactions instead of their Taxpayer Identification Number (Nomor
Pokok Wajib Pajak - NPWP). This new regulation is due to the ongoing data integration process between NIK
and NPWP. The Minister of Finance Regulation has outlined this rule for individual taxpayers, and the Director
General of Taxes (DGT) has confirmed it. This paper aims to explore the legal implications of the
implementation, focusing on the responsibilities of residents, and the government's objectives in implementing
NIK as an NPWP.
1
INTRODUCTION
Every Indonesian resident is assigned a unique
national identification number called NIK under the
Population Administration Law, which is valid for
their entire lifetime. Upon registration with the
population administration, such as at birth, every
Indonesian citizen will be provided with their own
NIK.
1
As per the Law on General Provisions and Tax
Procedures (UU KUP), it is mandatory for individuals
and organizations, who meet the requirements set by
the tax laws and regulations, to register as taxpayers at
the Directorate General of Taxes office. The
registration process includes providing information on
the taxpayer's place of residence or domicile. Once the
registration is complete, a Taxpayer Identification
Number (NPWP) is issued. The NPWP serves as a
personal identification number for taxpayers and is
used to manage their tax rights and obligations.
According to the revised Law 7/2021, Article 2
number 1, Indonesian residents are now required to
use their National Identity Number (Nomor Induk
Kependudukan - NIK) as their Taxpayer
Identification Number (Nomor Pokok Wajib Pajak -
NPWP). The Ministry of Finance has confirmed that
starting from January 1, 2024, NIK will be the
1
Badan Pusat Statistik, Statistik Perdagangan Luar Negeri
Indonesia: Ekspor 2021, diakses pada
primary identifier for tax-related transactions. The
Director General of Taxes (DGT) has explained that
this decision was made as a part of the ongoing data
integration process between NIK and NPWP. So far,
19 million NIK data have been consolidated out of
the targeted 42 million. Individual taxpayers can
find detailed information on
this rule in the Minister
of Finance Regulation Number
112/PMK.03/2022.
In Indonesia, using NIK as an individual taxpayer
identity requires the integration of the population
database with the taxation database. This integration is
crucial for creating taxpayers' profiles, which enable
them to exercise their rights and meet their tax
obligations. This paper will also address the challenges
faced by Indonesian residents regarding taxation,
especially since most business transactions are
monitored by the tax authorities. To conduct most
business transactions, a copy of the national identity
card (KTP) indicating the NIK is required.
In this paper, we will analyze the Government's
objectives for implementing the National Identity
Number (NIK) as a Taxpayer Identification Number
(NPWP). The government believes that combining
NIK and NPWP will help support Indonesia's one -data
policy. By having a standardized single identity
number that can be integrated into tax administration
services, the government aims to optimize the
Putro, Y. and Christiawan, R.
Legal Implications of Using National Identity Number (Nomor Induk Kependudukan - NIK) as Taxpayer ID (Nomor Pokok Wajib Pajak - NPWP) in the Indonesian Tax System.
DOI: 10.5220/0012583300003821
Paper published under CC license (CC BY-NC-ND 4.0)
In Proceedings of the 4th International Seminar and Call for Paper (ISCP UTA ’45 JAKARTA 2023), pages 517-521
ISBN: 978-989-758-691-0; ISSN: 2828-853X
Proceedings Copyright © 2024 by SCITEPRESS Science and Technology Publications, Lda.
517
integration of NIK and NPWP. This move is expected
to reduce tax avoidance practices and increase tax
revenues.
2
LITERATURE REVIEW
The literature review will start by examining the
population administration law that regulates the use of
tanggal 8 Agustus 2022 pada
https://www.bps.go.id/publication/download,
p.19.NIK. At present, two laws regulate the population
administration, namely Law Number 24 of 2013 and
Law Number 23 of 2006.
The second literature review will focus on the Law
on General Provisions and Tax Procedures (UU KUP).
UU KUP is a law that governs the registration of
Taxpayer Identification Number (NPWP) and the use
of National Identification Number (NIK) as an NPWP
identifier. The latest amendments to the Law on
General Provisions and Tax Procedures (UU KUP) are
Law Number 7 of 2021 on the Harmonization of Tax
Regulations and Law No. 6 of 2023. These laws were
enacted on March 31, 2023.
As part of our evaluation, we will be examining the
impact of using NIK as an NPWP for residents. This
implementation will require additional administrative
tasks, and the most important aspect of it is the need to
fulfill tax obligations for every business transaction.
We will be discussing the investigation of business
transactions that required the use of NIK.
One of the objectives of implementing NIK as an
NPWP is to prevent tax evasion. The government aims
to expand the taxpayers' basic data and ultimately
increase tax revenue.
The conclusions and recommendations will be
determined in the last part of the paper after reviewing
the four subjects mentioned above.
3
METHODS
Sociological or empirical legal research involves
studying legal identification and evaluating legal
effectiveness. The normative legal approach is
typically used in this type of research. It involves
analyzing secondary data sources such as laws,
regulations, books, and articles that are relevant to the
issues being studied.
The data used in primary legal materials is data on
applicable laws and regulations and related literature
that can help answer this research. The following is the
primary legal material that the author uses, including:
a.
Law Number 23 of 2006 governing population
administration,
b.
Law Number 24 of 2013 governing population
administration,
c.
Law Number 7 of 2021 concerning the
Harmonization of Tax Regulations,
d.
Law No. 6 of 2023 concerning Job Creation.
e.
Minister of Finance Regulation Number
112/PMK.03/2022 of 2022 concerning Taxpayer
Identification Numbers for Individual Taxpayers,
Corporate Taxpayers and Government Agency
Taxpayers.
Secondary legal materials are materials that convey
explanations of previous legal materials, namely
primary legal materials. Some secondary legal
materials can be sourced from literature, theses,
journals, or lecture legal materials that are related to
this research.
Tertiary legal materials are materials that can
provide complementary information or information
from the two previous legal materials, namely primary
and secondary legal materials. Sources of tertiary legal
materials can come from websites, Indonesian legal
dictionaries, Indonesian legal encyclopedias, and
others that can support this research.
The analysis is an explanation of all materials and
data that have been collected and explained previously
systematically. The explanation is described logically
according to the author's thoughts. There are several
types of data analysis techniques, but in this research,
the author used qualitative data analysis techniques.
Qualitative data analysis techniques, namely data
analysis methods by grouping and selecting data
obtained from field research according to their quality
and truth, then arranged systematically, which is then
studied using deductive thinking methods connected
with theories from library studies (secondary data),
Then a useful conclusion is made to answer the
problem formulation in this research.
4
RESULTS AND DISCUSSION
The following topics will be covered in this paper:
1.
NIK as a Single Identity Number for
Population Administration
According to Law Number 23 of 2006, Article 1, Point
12, a National Identification Number (NIK) is a unique
and singular number assigned to an Indonesian resident
for identification. Articles 13.1 and 13.2 states that
every resident must possess a NIK, which is issued by
the government through the implementing agency after
recording their biodata. The NIK is valid for the
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resident's entire life.
NIK as a Single Identity Number for Population
Administration must be possessed by every single
Indonesian Citizen.
2.
Taxpayer Identity Number/NPWP as an
Obligation for Indonesian Residents
Taxpayer Identification Number is a number given to
Taxpayers as a means in tax administration that is used
as personal identification or the identity of the
Taxpayer in carrying out his tax rights and obligations.
NPWP is a number given to taxpayers as a means
of tax administration which is used as personal
identification or identity of taxpayers in carrying out
their tax rights and obligations.
Every Taxpayer who has fulfilled the subjective
and objective requirements by the provisions of tax
laws and regulations is obliged to register at the office
of the Directorate General of Taxes whose working
area includes the Taxpayer's place of residence or
domicile and to whom a Taxpayer Identification
Number ("NPWP") is issued.
3.
Implementation of NIK as an NPWP
Indonesian law provides a legal basis for Indonesian
residents who have a personal identification number
(NIK) to obtain a tax identification number (NPWP).
This is established in Article 2 number 1 of Law
7/2021, which introduces a new provision in Article 2
paragraph (1a) of Law 6/1983. The NPWP is
specifically intended for individual taxpayers residing
in Indonesia and using their NIK for tax purposes.
The Indonesian government has regulated the use
of NIK (Nomor Induk Kependudukan) as an NPWP
(Nomor Pokok Wajib Pajak) for individual taxpayers
(WP) (OP) under the Law No. 7 of 2021 concerning
Harmonization of Tax Regulations (HPP). This means
that every OP taxpayer who satisfies the subjective and
objective requirements specified in the tax laws and
regulations is obligated to register at the office of the
Directorate General of Taxes of the Ministry of
Finance situated in the taxpayer's residence or domicile
to obtain an NPWP. This initiative aims to streamline
tax regulations and facilitate the process of taxation for
individual taxpayers in Indonesia. MOF Regulation
No. 112/2022's consideration letter c explains that NIK
is used as an NPWP to support Indonesia's one-data
policy. The policy aims to streamline tax
administration services by mandating the use of a
standardized and integrated single identity number.
As of July 14th, 2022, there are changes to the way
individual taxpayers who are residents in Indonesia
will be identified. Going forward, the NIK (Nomor
Induk Kependudukan) will be used as the NPWP
(Nomor Pokok Wajib Pajak) for all individual
taxpayers who are residents. This includes those who
did not previously have an NPWP and those who had
a 15-digit format NPWP before the enactment of this
new provision. However, for those who previously had
an NPWP, there will be a prior matching process to
ensure that their NIK is used as their new NPWP.
It is important to note that starting January 1, 2024,
NIK (Nomor Induk Kependudukan) will be converted
into NPWP (Nomor Pokok Wajib Pajak) and will
become the only identifier for taxpayers. This means
that all tax administration services and other
administrative services that currently require NPWP
will accept NIK or NPWP in the new format. To put it
simply, in 2024, NIK will completely replace NPWP,
and taxpayers will need to use it for all related services.
4.
Government's Objectives Regarding the
Implementation of NIK.
After the issuance of Law Number 7 of 2021
concerning Harmonization of Tax Regulations, the
NPWP of Indonesian residents now uses the NIK
(Education Identification Number). The objectives of
this policy are:
a.
To provide justice and legal certainty in the use
of NPWP in connection with the provisions on the
use of NIK as NPWP for individual taxpayers.
b.
To provide equality and realize effective and
efficient tax administration for individual taxpayers
who are Indonesian residents who use NIK as
NPWP.
c.
To support Indonesia's one data policy by
regulating the inclusion of a single, standardized,
and integrated identity number in tax
administration services.
Validation of NIK as NPWP, it was stated that NIK
is now an NPWP to better integrate the two systems
and prevent tax avoidance practices. This will help to
optimize tax revenues and ensure fair taxation for all.
5.
Legal Implications of Implementing NIK as
NPWP
Under the HPP Law, when using NIK as an NPWP, the
minister responsible for domestic government affairs
will share population data and user feedback with the
Minister of Finance for integration into the tax
database. To use NIK as an individual taxpayer
identity, there needs to be integration between the
population database and the taxation database. This
integration creates a taxpayer profile, which taxpayers
can utilize to fulfill their tax obligations and exercise
Legal Implications of Using National Identity Number (Nomor Induk Kependudukan - NIK) as Taxpayer ID (Nomor Pokok Wajib Pajak -
NPWP) in the Indonesian Tax System
519
their rights. The NIK to NPWP matching results are
categorized into valid data, which represents taxpayer
identity data matched with population data, and invalid
data, which represents taxpayer identity data not
matched with population data.
Because of the National Identification Number
(NIK) becoming an NPWP, the number of Individual
Taxpayers (WP OP) will increase, and so will the
amount of data on property ownership. Property
ownership data from third parties, such as ILAP
(agencies, institutions, associations, and other parties),
which was originally NPWP- based, has become NIK-
based so that assets that previously did not exist
become available because they have an NIK.
Under the mandate of Law Number 7 of 2021
concerning Harmonization of Tax Regulations (HPP),
the Ministry of Finance through the Directorate
General of Taxes (DJP) has implemented the Taxpayer
Voluntary Disclosure Program (PPS) from 1 January
2022 to 2022. 30 June 2022. This was marked by the
stipulation of Minister of Finance Regulation Number
196/PMK.03/2021 concerning Procedures for
Implementing the Voluntary Taxpayer Disclosure
Program.
PPS is a program that provides an opportunity for
Taxpayers (WP) to disclose tax obligations that have
not been fulfilled voluntarily through the payment of
Income Tax based on asset disclosure, so the aim is to
increase voluntary taxpayer compliance. This program
is organized based on the principles of simplicity, legal
certainty, and expediency.
The Directorate General of Taxes (DJP) has
changed their identification system, replacing the NIP
with NPWP. This change has allowed for a
comprehensive comparison of taxpayer asset data
based on SPT and DJP internal data, as well as
facilitating automatic exchange of information
(AEOI), /or ILAP, and even the State Officials' Wealth
Report (LHKPN). However, the legal implications of
this change on both participants and non-participants
of the Voluntary Disclosure Program (PPS), as well as
for the DJP itself, are as follows:
a.
As per the Government Regulation (PP)
Number 31 of 2012 and Minister of Finance
Regulation (PMK) Number 228 of 2017, 69 ILAPs
are responsible for submitting tax-related
information to the Directorate General of Taxes
(DJP). These ILAPs include agencies, institutions,
associations, and other parties. For instance, Bank
Indonesia (BI) provides information on debtors,
such as their identity, collateral/guarantor, and
financial reports.
b.
It should be noted that not all debtor data
includes NPWP information, but it has been
confirmed that NIK data is available. Similarly,
other data such as cash transactions for purchasing
motor vehicles may not always include the NPWP,
but the NIK is present. As a result, the property
ownership data submitted to the DJP will likely
increase as the NIK is used in place of the NPWP.
c.
Regarding the Directorate General of Taxes
(DJP), if there is any property ownership
information that has not been reported in the Asset
Notification Letter (SPH) or the Annual Tax Report
(SPT), it can be used as a basis for further research
or examination. In the case of assets that have not
been reported in the SPH while participating in the
Annual Tax Report (PPS), a Tax Payment Letter
(SKP) can be issued to collect a final income tax of
30%.
5
CONCLUSIONS
Based on the above discussion, we can draw several
conclusions, as outlined below:
a. Merely possessing a NIK does not
automatically qualify an individual as a taxpayer.
Specific criteria must be satisfied to be recognized
as a taxpayer.
b. The implementation of NIK as NPWP will
increase the amount of property ownership data.
This increase in data will affect PPS participants,
non-PPS participants, and DGT. In the case of PPS
participants, if any assets have not been reported,
they will be subject to a Final Income Tax of 30%
of the unreported assets.
c. Non-disclosure of property ownership
information in the SPT or SPH will result in an
investigation or examination by the authorities. It
should be noted that in these instances, a Tax
Assessment Letter (SKP) will be issued promptly.
d. If the source of a taxpayer's assets cannot be
proven to have been taxed, and the DJP fails to
carry out necessary research or audits, this could
potentially result in a loss of income tax revenue.
It is imperative that both residents/taxpayers, as well as
the DGT, adhere to the following recommendations to
ensure optimal outcomes:
a. Individual Indonesian taxpayers must
register at the Tax Office to obtain a Taxpayer
Identification Number (NPWP) upon meeting
subjective and objective requirements.
b. Taxpayers are required to submit their
Annual SPT form to the Tax Office every year, in
which they must report their income, assets, and
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liabilities. If there is an underpayment of taxes, the
taxpayer must settle the payment through a bank
before the March 31st deadline.
c. To ensure fair treatment for all taxpayers, the
Indonesian Tax Authority (DJP) may initiate an
investigation or examination and issue a Tax
Assessment Letter (SKP) if there is evidence of
property ownership that has not been reported in
the SPT or Asset Notification Letter (SPH).
ACKNOWLEDGEMENTS
This paper solely pertains to property and wealth that
is domestically stored and registered with NIK.
Researching assets without an identity card or NIK
can prove to be challenging, especially when it comes
to cash or tangible assets that are stored domestically.
In addition, further efforts are necessary when
researching assets that are stored outside of Indonesia
by the DJP.
REFERENCES
Law Number 23 of 2006 governing population
administration
Law Number 24 of 2013 governing population
administration
Law Number 7 of 2021 concerning the Harmonization of Tax
Regulations
Law No. 6 of 2023 concerning Job Creation.
Minister of Finance Regulation Number 112/PMK.03/2022
of 2022 concerning Taxpayer Identification Numbers for
Individual Taxpayers, Corporate Taxpayers and
Government Agency Taxpayers.
Badan Pusat Statistik, Statistik Perdagangan Luar Negeri
Indonesia: Ekspor 2021,
https://www.bps.go.id/publication/download
Legal Implications of Using National Identity Number (Nomor Induk Kependudukan - NIK) as Taxpayer ID (Nomor Pokok Wajib Pajak -
NPWP) in the Indonesian Tax System
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