The Directorate General of Taxes (DGT) of the Ministry of Finance (MoF) offers a facility to reduce or eliminate tax administrative penalties through the Administrative Penalty Reduction or Elimination Program (Pengurangan atau Penghapusan Sanksi Administrasi/PSA). This program is regulated by Minister of Finance Regulation Number 71 of 2026 (PMK 71/2026) and Director General of Taxes Decree Number KEP-239/PJ/2026, issued on October 8, 2026.
Through this program, taxpayers have the opportunity to receive a reduction of up to 100% in administrative penalties, namely fines and interest, in accordance with applicable provisions.
The PSA facility is not a tax amnesty. According to the DGT's PSA Program Guidebook, KEP-239/PJ/2026 only provides for the reduction or elimination of administrative penalties, not the principal tax due. Therefore, taxpayers must still settle the principal tax amount on which the penalty is based to meet the program's requirements.
The PSA facility covers various tax administrative penalties, including fines for the late submission of tax returns (surat pemberitahuan/SPT), interest on voluntary SPT corrections, and interest resulting from late tax payments or deposits. This facility also includes specific penalties in tax assessment letters (surat ketetapan pajak/SKP) and tax collection letters (surat tagihan pajak/STP), fines related to the issuance or completion of tax invoices, as well as specific interest penalties and increases based on tax audit results.
Furthermore, this facility applies to land and building tax (pajak bumi bangunan/PBB) administrative penalties, as well as penalties in SKPs resulting from audits of assets that were undisclosed or under-disclosed by participants in the Voluntary Disclosure Program (Program Pengungkapan Sukarela/PPS), subject to the specified requirements and deadlines.
Based on the tax obligation period, the PSA facility covers annual income tax (pajak penghasilan/PPh) returns up to the 2025 fiscal year and periodic tax returns up to the September 2026 tax period.
This facility basically applies to administrative penalties that have not yet been paid or settled. In addition to paying the principal tax, taxpayers must ensure that they are not currently pursuing legal action, such as filing an objection, appeal, or judicial review, regarding the related penalty or tax assessment, in accordance with the program's provisions.
For certain schemes, a 100% penalty reduction applies when the reporting or correction of the tax returns and the tax payment are made during the period of October 8 to December 31, 2026. The penalty reduction percentage then drops to 50% for the period of January 1 to March 31, 2027. Subsequently, a 25% reduction applies during the period of April 1 to June 30, 2027.
Taxpayers need to review their outstanding administrative penalties and ensure their obligations meet the program's requirements before submitting a request. Ideatax is ready to assist you in evaluating your tax situation and preparing the appropriate steps in accordance with the applicable regulations.
Also Read:
DGT Prepares Up to 100% Tax Penalty Reduction
Understanding Tax Collection: Procedures, Penalties, and Resolution
Tax Brief PMK 71/2026: Changes to Tax Objection Procedures and Sanctions
Writer: Fiorentina Renata Trixie | Editor: Thomas Rizal
