At a press conference in Jakarta on February 23, 2026, the Director General of Taxes announced that the Directorate General of Taxes (DGT) had frozen the shares of two taxpayers, valued at IDR 2.6 billion. However, the enforcement process could not proceed to the sale or auction stage immediately, as the DGT first needed to establish a designated account to receive the proceeds.
Although the regulatory framework governing the freezing and sale of shares was issued in 2025, its implementation only began in 2026. This development emphasizes the growing importance of managing the risk of share freezes, particularly for taxpayers holding shares in the capital market.
Legal Basis for Freezing and Seizing Shares
Through the Director General of Taxes Regulation Number 26/PJ/2025, the government sets out procedures for the seizure and sale of securities, specifically publicly traded shares, for tax collection purposes.
According to its recital, the regulation intends to ensure legal certainty, consistency, and effectiveness in tax enforcement. It provides detailed guidance on how the DGT may seize and dispose of tax bearer assets held in the capital market.
The regulation authorizes the DGT to freeze and seize shares owned by a tax bearer. Before taking such action, however, the DGT must request confirmation of the relevant financial account number and information on the tax bearer’s asset balance from the depository and settlement institution (Lembaga Penyimpanan dan Penyelesaian/LPP).
Request to Freeze Brokerage Accounts
Before initiating a share freeze, the DGT must:
- issue a seizure order; and
- obtain information on the tax bearer’s financial accounts.
Requests to freeze securities-related accounts may be submitted through:
- the Financial Services Authority, which forwards a written instruction to the LPP to freeze shares in the tax bearer’s securities sub-account in accordance with capital market regulations; and
- the bank administering the tax bearer’s fund account (rekening dana nasabah/RDN) with respect to the balance held in that account.
Seizure and Sale of Shares
Once the official report on the freezing of shares has been issued and the tax debt remains unpaid, the tax bailiff may proceed with the seizure. The seizure may cover shares held in the tax bearer’s securities sub-account and/or funds held in the tax bearer’s RDN.
The bailiff prepares the Minutes of Seizure, which the tax bailiff, the tax bearer, witnesses, and the LPP will sign. Copies are provided to both the tax bearer and the LPP.
If the outstanding tax debt remains unpaid within 14 days of seizure, the DGT may proceed with the sale of the seized shares to satisfy the liability. The DGT is also authorized to transfer funds from the tax bearer’s RDN to the DGT’s designated account.
The sale of shares is conducted through the stock exchange via licensed brokerage firms that are members of the exchange.
Mitigating the Risk of Share Freezes
Given the DGT’s authority to freeze, seize, and sell shares, taxpayers should take proactive steps to manage their exposure.
Maintain Administrative and Substantive Compliance
Ensure that all tax returns are filed on time, taxes are paid before the due date, and any outstanding liabilities are settled promptly.
Apply for Installment or Deferral Arrangements
Where liabilities are substantial, taxpayers should promptly apply for installment payments or deferral arrangements to prevent enforced collection by tax bailiffs.
Make Partial Payments
If full settlement is not immediately feasible, partial payments, combined with good-faith engagement, may reduce enforcement risk.
Act Before a Distress Warrant Is Issued
Enforcement typically escalates from a warning letter to a distress warrant, followed by seizure. The risk increases significantly once a distress warrant is issued. Early engagement and payment, ideally before or immediately after a warning letter, can prevent further action.
Consider Restructuring or Corporate Action
Liquidity improvements through restructuring may help taxpayers meet their obligations and avoid enforcement. Options may include debt restructuring, rights issues, disposal of non-core assets, or debt-to-equity conversions.
Avoid Improper Asset Transfers
Transferring assets to evade tax collection may be considered an unlawful act and could expose the tax bearer to more severe legal consequences, including potential criminal liability.
The implementation of the Director General of Taxes Regulation Number 26/PJ/2025 confirms that publicly traded shares can be frozen, seized, and sold for tax collection purposes. As a result, managing the risk of share freezes should form part of a taxpayer’s broader tax compliance and risk management strategy.
Also Read:
https://ideatax.id/articles/updates-to-the-05-msme-final-income-tax-and-its-business-impact
https://ideatax.id/articles/article-26-withholding-tax-on-foreign-taxpayers
https://ideatax.id/articles/navigating-tax-payments-in-the-new-coretax-system
