National ID Number Replaces NPWP

In an attempt to simplify the tax framework in Indonesia, the Director General of Tax (“DGT”) has issued DGT Regulation No. PER-6/PJ/2024 (“Regulation”) to merge the individual tax ID numbers (Nomor Pokok Wajib Pajak or NPWP) with the national ID (Kartu Tanda Penduduk or KTP) number (called Nomor Induk Kependudukan or “NIK”). The Regulation is the implementing regulation of Minister of Finance Regulation No. 112/PMK.03/2022, as lastly amended by Minister of Finance Regulation No. 136 of 2023.

By using NIK as the primary identifier for tax purposes, it is hoped that it will streamline tax administration, reduce bureaucratic hurdles, and enhance efficiency. This alert will explore the implications of the Regulation, how it will affect taxpayers, and what steps affected taxpayers need to take to adapt to this change.