The Urgency for the Implementation of Transition Norm “Lex Favor Reo” in the Imposition of Tax Sanction in Indonesia

Taxation regulations in Indonesia are very dynamic, due to frequent changes in tax laws and regulations. Taxpayers need to make extra efforts to keep abreast of the latest tax regulations. This can cause taxpayers to experience difficulties in carrying out their tax obligations. On the other hand, Indonesia adheres to the principle of legal fiction, so that for every statutory regulation that has been promulgated, the public is deemed to have known the law and understands it, so that there is no excuse for the violations to the law. Problem may arise when the tax authorities conduct tax audits on taxpayers and find the taxpayers do not carry out tax obligations in accordance with the taxation provisions in effect at the time the transaction happens, so that the tax authorities will impose tax sanctions on taxpayers in accordance with the tax regulations in force at the time when the transactions happen, not based on the latest tax regulations, which are in effect when the taxpayer's error is discovered by the tax authorities. The imposition of these sanctions raises a problem: has the imposition of tax sanctions provided justice and legal certainty? How is the imposition of tax sanctions that provide justice and legal certainty? Legal certainty is one of the main factors for investors in deciding which countries to invest in. Therefore, in our opinion, a “new model for the imposition of tax sanctions” is needed in Indonesia, namely by applying the Lex Favor Reo Transitoir (transition) principle in the imposition of tax sanctions. This research is significant to conduct, so that the imposition of tax sanctions provides better justice and legal service. The application of the “new model of imposition of tax sanctions” also has urgency, so that the imposition of tax sanctions for taxpayers provides a sense of justice and legal certainty which in turn can attract investors to invest in Indonesia as well as to avoid capital flight. This condition will make Indonesian economy grow rapidly and, in the end, will increase state revenue from taxes.