Fraud is common for VAT or similar taxes across the globe. It is widespread everywhere tax invoices are issued and used as a basis for tax settlement. Tax fraud, in particular issuance of fictitious invoices, was the reason for the introduction of the new policy in Indonesia. VAT taxpayers are now required to prepare electronic tax invoices under a prescribed process. Also, e-invoices must first be presented to the tax office before they can be further used in business transactions.
The Indonesian government introduced the electronic invoice system (e-Faktur Pajak) for the first time back in 2013. Shortly after that, on 1 July 2014, the Directorate General of Taxes (DGT) officially implemented e-Invoices with an electronic tax invoice submission feature.
Between 2015 and 2016, all VAT taxpayers were requested to implement and use the e-Faktur system. It was arranged in two stages: as of 1 July 2015, the obligation took effect for taxpayers from Java and Bali, and as of 1 July 2016 for taxpayers from other regions of Indonesia.
Source: Ridvan Yigit on LinkedIn
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