SP2DK: Recalibrated

In Indonesia’s tax administration, the absence of a tax audit does not necessarily mean the absence of supervision. Oversight often begins well before a formal audit is initiated, through an administrative process designed to assess the coherence and consistency of a taxpayer’s reporting. At the center of this early stage stands the Letter Requesting Explanation of Data and/or Information (SP2DK), an instrument that Minister of Finance Regulation Number 111 of 2025 on Taxpayer Compliance Supervision (PMK 111/2025) now formally positions as a central pillar of the taxpayer compliance supervision regime.

SP2DK serves as a supervisory mechanism through which the Directorate General of Taxes (DGT) seeks clarification on data and information that may indicate potential inconsistencies in the fulfilment of tax obligations. Although it is not classified as a tax audit, SP2DK often shapes the course of subsequent administrative actions. Depending on the quality and substance, completeness and credibility of the taxpayer’s response, the supervision process may be concluded at this stage or, converselyalternatively, escalated into a formal examination.

Legal Status and Regulatory Clarity

Prior to the issuance of PMK 111/2025, the applicationuse of SP2DK was governed primarily by internal DGT policy, most notably Director General of Taxes Circular Letter Number SE-05/PJ/2022. Within this framework, SP2DK functioned as an operational reference for Account Representatives (AR) in following up on the results of compliance reviews, risk profiling and analytical findings derived from internal and third-party data.

As the regime was anchored in a circular letter, its legal force was inherentlythis framework carried limited normative force and binding largely within the tax authority itself. This arrangement left considerable ambiguity regarding the scope of the DGT’s discretion, as well as the procedural position and rights of taxpayers in responding to an SP2DK.

PMK 111/2025 addresses this uncertainty by formally incorporating SP2DK into the generally applicable taxpayer compliance supervision framework. The regulation codifies the existing 14-day response period previously applied under internal DGT policy and, for the first time, introduces the possibility of a 7-day extension upon request. By elevating these procedural timelines into a formal regulation, this measure transforms SP2DK is transformed from an internally driven administrative practice into a rule-based supervisory mechanism with broader legal normative authority and clearer procedural boundaries.

Expansion of Supervisory Coverage

The regulation further broadens the scope of parties subject to SP2DK. In addition toBeyond registered taxpayers, SP2DK may now be issued to individuals or entities that have not yet registered as taxpayers, provided that the data and information available to the DGT indicate the existence of potential existence of unmet tax obligations.

For registered taxpayers, SP2DK generally captures the results of data reviews concerning the fulfillment of tax obligations. For unregistered taxpayers, the communication is typically administrative and persuasive in nature, including encouragement to obtain a Taxpayer Identification Number, apply for Taxable Entrepreneur status, or register relevant Land and Building Tax objects. Through this expansion, the supervisory framework extends beyond formally registered taxpayers and reinforces the preventive dimension of tax administration.

Administrative Implications

Notwithstanding its enhanced strengthened legal footing, PMK 111/2025 clearly distinguishes SP2DK from tax audits and preliminary evidence examinations. The issuance of an SP2DK does not, in itself, give rise toresult in the issuance of a tax assessment or formal determination of tax underpayment.

Nevertheless, the taxpayer’s response plays a decisive role in determining the trajectory of the supervision process. Where explanations are deemed sufficient and supported by relevant adequate documentation, the process may be concluded resolved at the administrative stage. Conversely, inadequate incomplete or unsubstantiated responses may prompt escalation into a formal audit in accordance with applicable prevailing tax laws and regulations. In this respect, SP2DK functions operates as an early-stage supervisory mechanism within Indonesia’s self-assessment system, balancing administrative efficiency with enforcement readiness.

Recalibrate

Overall, PMK 111/2025 redefines reflects a strategic recalibration of Indonesia’s tax compliance governance. By formalizing SP2DK within a clear legal framework, the regulation strengthens the DGT’s from an internally driven administrative practice into a formal component of Indonesia’s tax compliance supervision architecture capacity to supervise compliance proactively while simultaneously enhancing procedural certainty for taxpayers.

With a clearer legal basis, more structured procedures, and broader supervisory reachThe challenge lies in ensuring consistent, proportionate and transparent application., Allowing SP2DK to serve not as a coercive prelude to tax audit, is positioned to assume a more prominent role in the evolving landscape of tax administration reformbut as a credible mechanism for dialogue, correction and voluntary compliance. If implemented with discipline and restraint, Within this framework, has the potential to reinforce trust in the tax system and advance Indonesia’s long-term objective of a more resilient, data-driven and cooperative carefully structured and proportionate responses are essential not only to ensure regulatory compliance, but also to preserve the balance between effective supervision and the protection of taxpayers’ procedural rights environment. (Shintya)