When you will understand tax more deeply, it would be nice if you know in advance how the position of tax law in Indonesia. This is very important considering the law is the main foundation of tax implementation in Indonesia. To understand more about the position of tax law in Indonesia, consider the following article carefully.

Understanding Tax Law

Tax Law is a collection of official and written regulations governing the relationship between the government as a tax collector and the people as taxpayers. The government in this case is represented by the Directorate General of Taxes of the Ministry of Finance of the Republic of Indonesia, who has the authority to take one’s wealth in the form of tax payments, manage it, and return it to the public. The handover is indirectly through public services taken from the state treasury.

Tax law is a legal product and is a part of legal science that regulates tax rights and obligations both from the government side and taxpayers that must be obeyed and implemented. Thus, the tax law can not be separated from legal sanctions as a consequence for the government (tax authorities) and taxpayers to comply with the tax regulations. The intended consequences are legal sanctions in the form of administrative sanctions and criminal sanctions.

The Status of Tax Law in Indonesia

Tax law is part of public law. Tax law in Indonesia adheres to imperativeism. That is, the implementation of tax collection cannot be postponed. When there is a tax objection filed by a taxpayer that has been determined by the government, before there is a decision from the Director General of Taxes about objections received, then the taxpayer must first pay the tax in accordance with what has been determined. The following is an explanation of the position of tax law:

  1. Civil Law governing the relationship between one individual and another individual
  2. Public law which regulates the relationship between the government and its people. Among other things consisting of State Administrative Law, State Administrative Law (State Administrative Law), Tax Law and Criminal Law.

Based on the two points above, it can be seen that the position of tax law is part of public law. Tax law regulates the relationship between the government as a tax collector and the people as taxpayers.

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Various Tax Laws

Tax law is divided into two types:

Material Tax Law

This law contains norms that explain the circumstances, actions, taxable legal events (tax objects), taxable parties (tax subjects), the amount of tax charged (tax rates), everything related to arising and eliminating tax debt , and the sanctions service in legal relations between the government and taxpayers.

Examples of forms of material tax law are income tax (PPh), Value Added Tax (VAT), and Sales Tax on Luxury Goods (VAT and PPnBM).

Formal tax law

Formal tax law is a law that contains procedures for bringing material tax law into reality or realization. Formal tax law contains procedures or procedures for determining the amount of tax debt, the rights of the tax authorities to carry out monitoring and evaluation. It also determines the obligation of taxpayers to keep books or records and procedures for filing objections or appeals.