KH buddy often pays taxes late? Be careful, paying taxes late can expose you to administrative sanctions to criminal sanctions.
Yes, for the smooth running of the country, the government seriously sets sanctions for taxpayers who fail to pay taxes. Sanctions related to taxation can occur in the form of warning letters to criminal sanctions. Administrative sanctions themselves consist of criminal sanctions, interest sanctions, and increased sanctions. Criminal sanctions are usually imposed on taxpayers who commit serious violations and cause large losses to state revenue. Of course KH Friend doesn’t want this to happen to your business, right? So, how can you avoid paying taxes late? Check out the explanation in the following article.
Types of Sanctions for Late Tax Payment
Before discussing further about the tips, KH Friend needs to first know what types of sanctions will be imposed if you are late in paying taxes. Here is the explanation:
Administrative Sanctions
Administrative sanctions related to taxation activities consist of fines, interest sanctions, and increased sanctions. The provisions of administrative sanctions are regulated in Law Number 28 Year 2007 concerning General Provisions of Taxation (KUP Law). The administrative sanctions consist of:
Penalty Sanctions
Applicable for violations related to reporting obligations. The value of the fine varies, depending on the type of tax that has been reported late in accordance with the applicable laws and regulations.
Interest Sanctions
Based on Article 9 paragraph (2) of the KUP Law, it is explained that taxpayers who are late in paying taxes will be fined at 2% per month, calculated from the due date to the date of payment.
Sanctioned Increase
Sanctions in the form of an increase in the amount of tax of around 50% to be paid from the value of the underpaid tax. Increased sanctions are imposed on taxpayers who commit certain violations, such as falsifying the amount of income on the tax return.
Criminal Sanctions
This type of sanction is the heaviest sanction in the world of taxation. Criminal sanctions are usually imposed on taxpayers who commit serious violations and cause large losses to state revenue. For example, a businessman issues tax invoices and collects VAT, but does not register as a Taxable Entrepreneur (PKP). So that the VAT collected is not deposited to the state.
Tips to Avoid Late Tax Payments
Late tax payments will be detrimental because taxpayers are forced to pay the fine. The more often the tax payment is late, the greater the fine that must be paid. Delay in paying taxes will be more detrimental if it occurs in companies that bear and manage a lot of taxes, especially employee taxes. This happens because tax fines will make company expenses so swollen. In order not to lose because of a lot of fines or deal with criminal law, consider the following tips to avoid paying taxes late:
Develop a Good Financial Plan
Good financial planning is an important step towards paying taxes on time. Make a budget that includes tax obligations and allocate funds appropriately. If necessary, consult a financial expert or accountant to help you develop an appropriate financial plan.
Calculate Tax Precisely
One of the reasons taxpayers are late in paying taxes is incorrect tax calculations. This is due to not understanding some of the provisions related to the tax concerned. Therefore, taxpayers need to know the appropriate tax treatment so that later there is no wrong calculation. This is to shorten the recalculation time, especially if the tax payment deadline is approaching.
Pay Tax on Time
Another obstacle that taxpayers usually face is related to the tax payment process. When paying taxes manually, taxpayers must obtain a Billing ID at the Tax Office (KPP). Then, taxpayers need to go to the bank to make payments and get proof of payment that must be reported back to the KPP. Related to this, maybe you can consider using professional tax services. So that tax payments and reporting can be done more easily and quickly.
Create a tax payment reminder
The next tip is to create a reminder (alarm) according to the tax payment deadline date. This needs to be done so that KH Friend does not forget the tax payment deadline set by the government. Given, the types of taxes that must be paid, especially for corporate taxpayers or companies, are many, so there are also many payment deadlines throughout the year.
Monitoring Tax Rule Changes
Tax regulations may change from time to time. It is important for Friend KH to keep monitoring and understanding the changes.
READ ALSO: Haven’t filed your annual tax return yet?
Be sure to learn the new rules issued by the tax authority and make sure your KH buddy follows the changes in your tax payments.
What are the Benefits of Paying Tax on Time?
Paying taxes on time is an obligation for every taxpayer. By fulfilling this obligation, KH Friend can avoid sanctions and fines that can harm your finances. In addition, paying taxes on time also provides a number of benefits including the following:
Building a Good Reputation
Timely tax payments help build a good reputation in the eyes of authorities and business partners. It shows discipline and responsibility in managing finances. A good reputation can open up new opportunities and increase trust in business transactions.
Keeping Cash Flow Stable
By paying taxes on time, KH pals can better manage cash flow. By preparing and allocating funds to pay taxes on time, KH pals can avoid cash flow shortages that can affect business operations or personal finances.
Improving the country’s economic stability
In Indonesia, taxes are the largest contributor to state revenue. Taxes are used to finance the budget related to the development and interests of the country. Therefore, paying taxes on time can support revenue stability to help improve Indonesia’s economic conditions.
KH Contact
Paying taxes late will harm individuals and companies because there are sanctions. The more often the tax payment is late, the greater the fine that must be paid. To make it easier for KH Pals to fulfill tax obligations on time, you can just leave all the arrangements to Kontrak Hukum. We provide the first digital subscription service in Indonesia, Digital Business Assistant (DiBA) that can help you to calculate the amount of tax that must be paid, prepare financial reports, and update changes in tax regulations that occur.
ALSO READ: Check out the Latest Income Tax (PPh) Tariff Provisions Here!
KH friends can also take care of other business needs such as business licenses, IPR registration, to making contract agreements, only in one place with DiBA Kontrak Hukum!
What are you waiting for? Let’s fulfill tax payment obligations and other business needs with KH by visiting the KH Services – DiBA page. If you have other questions, you can consult for free at Ask KH and send a direct message (DM) to Instagram @kontrakhukum.
