Indonesia: mandatory e-invoicing as from 1 July 2016

August 19, 2015  |  Asia, Compliance, Electronic Invoicing

As from 1 July 2015, taxable companies registered in Java and Bali are required tot use electronic invoices. And as from 1 July 2015 all Indonesian companies are required tot use electronic invoices. The Indonesian Minister of Finance Bambang P.S. Brodjonegoro expects a succesful electronic invoice implementation to raise the VAT revenue.

Indonesia currently has a -very- weak tax revenue system, mainly due to fictitious invoices that cause a large tax restitution volume, with a negative impact to the total Indonesian VAT revenue.

So, by implementing this mandatory e-invoice system, he Minister of Finance expects it to raise VAT revenue and reduce tax restitution:
“We have not had good system, it’s manual, so there are a lot of fictitious invoices, so the restitution is large. This erodes VAT revenue this year. We already apply the electronic invoice, which aims to rise VAT revenue and reduce restitution. We expect this thing to improve VAT performance in the future.”

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