Inconsistence of Self Assessment Principles Implementation in Indonesian Tax Law

In 1983, Indonesia made tax reforms by substituting official assessment principles and applying the self-assessment principle in the tax collection system. Self Assessment principle is a tax collection system that gives trust to Taxpayers to calculate, deposit, and self-report the tax payable to the tax authorities (Government). In the amendment of Law Number 6 Year 1983 on General Provisions and Procedures of Taxation (also known as UU KUP), self-assessment principle is not consistently adopted, so that it creates a contradiction in its application. The concept of the provision and procedure of interest payment is not regulated in accordance with the principle of self-assessment, as the requirement for the reimbursement of tax overpayment shall be examined by the tax authorities and the tax authorities shall issue tax assessment letters to determine the indebted tax. The provisions and procedures for giving interest payments to a Taxpayer are determined by a tax assessment letter that has been paid which results in an overpayment of taxes. Interest payments are not calculated on the basis of tax overpayment in the Notice. The application of norms governing interest payments and sanctions in the form of interest in UU KUP is not regulated equally between tax authorities and taxpayers. Therefore, the rights and obligations of the Taxpayer in UU KUP cannot be met.