On 20 August 2026, KP2KP Mempawah in West Kalimantan formalized a coordination protocol with the local Immigration Office to strengthen tax compliance monitoring of foreign workers (Tenaga Kerja Asing/TKA). This initiative addresses persistent leakage in Article 26 Income Tax collections from expatriates employed in the region’s mining, plantation, and construction sectors. Under the synergy, immigration data on work permit (IMTA) issuance and stay permit (KITAS) renewals will be cross-referenced with DJP’s taxpayer database to identify non-registered foreign employees. The collaboration leverages Law No. 6/2023 provisions on inter-agency data exchange and supports the OECD’s BEPS Action 13 framework on transfer pricing documentation for multinational employer structures.
Key Takeaways
- Data-Driven Enforcement: Real-time sharing of IMTA/KITAS data enables DJP to detect unregistered foreign workers within 30 days of permit issuance, accelerating Article 26 (20% final) withholding compliance.
- Employer Liability Focus: The program targets principal employers who fail to withhold or deposit Article 26 tax, with penalties up to 100% of unpaid tax under Article 19 of Law No. 6/2023.
- Regional Pilot Model: The Mempawah framework serves as a replicable model for 34 provincial tax offices, addressing an estimated Rp2.3 trillion annual revenue gap from foreign worker non-compliance.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement