GENERAL PROVISIONS AND PROCEDURES FOR COLLECTION OF REGIONAL TAXES BY THE GRACE OF THE ALMIGHTY GOD THE PRESIDENT OF THE REPUBLIC OF INDONESIA,

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1 Revokes PP 91/2010 Type: By: GOVERNMENT REGULATION (PP) THE PRESIDENT OF THE REPUBLIC OF INDONESIA Number: 55 YEAR 2016 (55/2016) Date: 21 NOVEMBER 2016 (JAKARTA) Reference: LN 2016/244; TLN NO 5950 Title: GENERAL PROVISIONS AND PROCEDURES FOR COLLECTION OF REGIONAL TAXES BY THE GRACE OF THE ALMIGHTY GOD THE PRESIDENT OF THE REPUBLIC OF INDONESIA, Considering: a. whereas in the context of supporting the increase of receipt of regional taxes, it is necessary to strengthen the administration of collection of regional taxes; b. whereas the arrangement in Government Regulation Number 91 Year 2010 regarding Types of Regional Taxes Collected Based on Stipulation of Head of Region of Paid Personally by Taxpayers, is not sufficient to meet the regions needs in implementing the collection of regional taxes; c. whereas based on the considerations as intended in point a, point b, and to implement the provisions of Article 98 of Law Number 28 Year 2009 regarding Regional Taxes and Regional Levies, it is necessary to stipulate Government Regulation regarding General Provisions and Procedures for Collection of Regional Taxes; In view of: 1. Article 5 paragraph (2) of the 1945 Constitution of the Republic of Indonesia; 2. Law Number 28 Year 2009 regarding Regional Taxes and Regional Levies (State Gazette of the Republic of Indonesia Year 2009 Number 130, Supplement to State Gazette of the Republic of Indonesia Number 5049); HAS DECIDED: To stipulate: GOVERNMENT REGULATION REGARDING GENERAL PROVISIONS AND PROCEDURES FOR COLLECTION OF REGIONAL TAXES. CHAPTER I GENERAL PROVISIONS Article 1

2 Referred to herein as: 1. Central Government, hereinafter referred to as the Government, shall be the President of the Republic of Indonesia holding governmental authority of the state of the Republic of Indonesia as intended in the 1945 Constitution of the Republic of Indonesia. 2. Regional Government shall be the head of region as organizing element of regional administration leading the implementation of governmental affairs constituting the authority of autonomous region. 3. Head of Region shall be the governor for province or regent for regency or mayor for city. 4. Officer shall be an employee given certain duties in the field of regional taxation in accordance with the provisions of laws and regulations. 5. Autonomous Region, hereinafter referred to as Region, shall be a unity of legal community with area borders authorized to arrange and manage the governmental affairs and interests of the local community in accordance with their own initiatives based on the community s aspirations under the system of the Unified State of the Republic of Indonesia. 6. Taxpayers shall be individuals or Entities, covering Tax payers, Tax withholders, and Tax collectors, having taxation rights and obligations in accordance with the provisions of laws and regulations in the field of Regional taxation. 7. Regional Regulation shall be legislation prepared by the Regional House of Representatives of the Province and/or Regency/City upon joint approval of the Head of Region. 8. Regulation of the Head of Region shall be Governor Regulation and/or Regent/Mayor Regulation. 9. Regional Taxes, hereinafter referred to as Tax, shall be mandatory contribution to the Region payable by individuals or Entities which is coercive in nature based on Law, by not receiving direct reward and used for the Region s needs for the maximum welfare of the people. 10. Land and Building Tax of Rural and Urban Sector, hereinafter abbreviated to PBB-P2, shall be Tax on land and/or building owned, controlled, and/or utilized by individuals or Entities, except areas used for plantation, forestry, and mining business activities. 11. Duty for the Acquisition of Rights to Land and Building, hereinafter abbreviated to BPHTB, shall be Tax on the acquisition of rights to land and/or building. 12. Tax Object Sale Value, hereinafter abbreviated to NJOP, shall be the average price obtained from sale-purchase transaction that occurs fairly, and in the event that there is no sale-purchase transaction, NJOP shall be determined by comparison of price to other similar objects, or new acquisition value, or substitute NJOP.

3 13. Collection shall be a series of activities starting from the gathering of data on Tax objects and subjects, determination of the amount of Tax payable up to the Collection of Tax to Taxpayers as well as supervision on its deposit. 14. Regional Tax Return, hereinafter abbreviated to SPTPD, shall be a letter used by Taxpayers to report the calculation and/or payment of Tax, Tax objects and/or non-tax objects, and/or assets and liabilities in accordance with the provisions of laws and regulations in Regional taxation. 15. Notification on Tax Object, hereinafter abbreviated to SPOP, shall be a letter used by Taxpayers to report data on subjects and objects of PBB-P2 in accordance with the provisions of laws and regulations on Regional taxation. 16. Regional Tax Payment Form, hereinafter abbreviated to SSPD, shall be proof of payment or deposit of Tax made by using form or by any other methods to the Regional treasury through the payment point appointed by the Head of Region. 17. Regional Tax Assessment Letter, hereinafter abbreviated to SKPD, shall be Tax assessment letter determining the amount of Tax principal payable. 18. Notification on Tax Due, hereinafter abbreviated to SPPT, shall be a letter used to notify the amount of PBB-P2 payable to Taxpayers. 19. Regional Tax Underpayment Assessment Letter, hereinafter abbreviated to SKPDKB, shall be Tax assessment letter determining the amount of Tax principal, Tax credit, Tax principal underpayment, administrative sanction, and Tax to be paid. 20. Additional Regional Tax Underpayment Assessment Letter, hereinafter abbreviated to SKPDKBT, shall be Tax assessment letter determining additional amount to the amount of Tax already stipulated. 21. Nil Regional Tax Assessment Letter, hereinafter abbreviated to SKPDN, shall be Tax assessment letter determining that the amount of Tax principal is the same as the amount of Tax credit or Tax is not payable and there is no Tax credit. 22. Regional Tax Overpayment Assessment Letter, hereinafter abbreviated to SKPDLB, shall be Tax assessment letter determining the amount of Tax overpayment because the amount of Tax credit is larger than the Tax payable or that should not be payable. 23. Regional Tax Collection Letter, hereinafter abbreviated to STPD, shall be a letter to conduct collection of Tax and/or administrative sanction in the form of interest and/or fine. 24. Warning Letter shall be a letter issued by Officer to reprimand Taxpayers to settle their Tax debts. 25. Distress Warrant shall be an order to pay Tax debts and costs of Tax collection. 26. Decision on Correction shall be a decision correcting typographical error, miscalculation, and/or mistake in the application of certain provisions in laws and regulations on Regional Taxation that is found in Notification on Tax Due, Regional Tax Assessment Letter, Regional Tax Underpayment Assessment Letter, Additional Regional Tax Underpayment Assessment Letter, Nil Regional

4 Tax Assessment Letter, Regional Tax Overpayment Assessment Letter, Regional Tax Collection Letter, Decision on Correction, or Decision on Objection. 27. Decision on Objection shall be a decision on objection to Notification on Tax Due, Regional Tax Assessment Letter, Regional Tax Underpayment Assessment Letter, Additional Regional Tax Underpayment Assessment Letter, Nil Regional Tax Assessment Letter, Regional Tax Overpayment Assessment Letter, Regional Tax Collection Letter, Decision on Correction, or Decision on Objection, or to withholding or Collection of the third party filed by Taxpayers. 28. Appeal Decision shall be a decision of Tax judicature on appeal to Decision on Objection filed by Taxpayers. 29. Examination shall be a series of activities conducted to examine the completeness of filling out of tax return and its attachments including examination on the accuracy of its writing and calculation. 30. Collection shall be a series of actions so that Tax guarantor settle Tax debts and costs of Tax collection by reprimanding or warning, conducting instantaneous and lump sum Collection, notifying Distress Warrant, proposing prevention, conducting confiscation, conducting physical confinement, selling the confiscated goods. 31. Audit shall be a series of activities of gathering and processing data, information, and/or evidence conducted objectively and professionally based on an Audit standard to test the compliance in fulfillment of Regional taxation obligations and/or for other purposes in the context of implementing laws and regulations on Regional taxation. CHAPTER II TYPES OF TAX AND ARRANGEMENT OF TAX STIPULATION IN REGIONAL REGULATION Part One Types of Tax Collected Based on Stipulation of Head of Region or Paid Personally by Taxpayers Types of Tax shall consist of: a. Provincial Tax; and b. Regency/City Tax. Article 2 Article 3 (1) Types of Provincial Tax collected based on stipulation of Head of Region shall consist of: a. Motor Vehicle Tax; b. Duty on Transfer of Ownership of Motor Vehicles; and

5 c. Surface Water Tax. (2) Types of Provincial Tax paid personally based on calculation by Taxpayers shall consist of: a. Motor Vehicle Fuel Tax; and b. Cigarette Tax. (3) Types of Regency/City Tax collected based on stipulation of Head of Region shall consist of: a. Advertisement Tax; b. Groundwater Tax; and c. PBB-P2. (4) Types of Regency/City Tax paid personally based on calculation by Taxpayers shall consist of: a. Hotel Tax; b. Restaurant Tax; c. Entertainment Tax; d. Street Lighting Tax; e. Non-Metal Mineral and Rock Tax; f. Parking Tax; g. Swallow s Nest Tax; and h. BPHTB. Part Two Arrangement of Tax Stipulation in Regional Regulation Article 4 (1) Tax shall be stipulated in Regional Regulation. (2) Regional Regulation as intended in paragraph (1) shall at least stipulate provisions regarding: a. name, Tax objects, and Tax subjects; b. basis of charge, tariff, and calculation method of Tax; c. area of Collection; d. Tax period;

6 e. stipulation; f. procedure for payment and collection; g. expiry; h. administrative sanction; and i. date of coming into effect. (3) Regional Regulation on Tax may also stipulate provisions regarding: a. granting of reduction, relief, and exemption in certain events of and from Tax principal and/or the sanction; b. procedure for filing and settling objection; c. procedure for nullification of Tax receivables which have expired; and/or d. principle of reciprocity, in the form of granting of reduction of, relief of, and exemption from Tax to embassies, consulates, and representatives of foreign countries in accordance with international common practices. CHAPTER III REGISTRATION OF TAXPAYERS AND TAX PERIOD Part One Registration of Taxpayers Article 5 (1) Taxpayers for types of Tax collected based on stipulation of Head of Region as intended in Article 3 paragraph (1) and paragraph (3) must register Tax objects to Head of Region by using: a. Tax object registration letter for types of Tax collected based on stipulation of Head of Region as intended in Article 3 paragraph (1) and paragraph (3) sub-paragraph a and sub-paragraph b; and b. SPOP for types of Tax collected based on stipulation of Head of Region as intended in Article 3 paragraph (3) sub-paragraph c. (2) Taxpayers for types of Tax paid personally based on calculation by Taxpayers as intended in Article 3 paragraph (2) sub-paragraph a and paragraph (4) sub-paragraph a up to sub-paragraph g must register themselves to Head of Region to obtain Regional Taxpayer registration number. (3) The provisions as intended in paragraph (2) shall be excluded for: a. Taxpayers of motor vehicle fuel tax and collectors of Motor Vehicle Fuel Tax having the status of State-Owned Enterprises or Regional Government-Owned Enterprises; and b. Electric power supplier having the status of State-Owned Enterprises or Regional Government-Owned Enterprises.

7 (4) In the event that Taxpayers as intended in paragraph (2) do not register themselves, Head of Region shall issue Regional Taxpayer registration number ex officio based on the data obtained or owned by the Region. Part Two Tax Period Article 6 (1) Tax Period shall be applicable for types of Tax paid personally based on calculation by Taxpayers as intended in Article 3 paragraph (2) and paragraph (4). (2) The provisions on Tax period shall be excluded for BPHTB as intended in Article 3 paragraph (4) sub-paragraph h. CHAPTER IV TAX STIPULATION, PAYMENT, REPORTING, AND ASSESSMENT Part One Tax Stipulation Article 7 (1) Head of Region or the appointed Officer shall stipulate Tax payable for the types of Tax collected based on stipulation of Head of Region as intended in Article 3 paragraph (1) and paragraph (3) sub-paragraph a and sub-paragraph b based on Tax object registration letter as intended in Article 5 paragraph (1) sub-paragraph a by using SKPD. (2) Head of Region may issue SKPD ex officio based on the data obtained or owned by the Region in the event that Taxpayers do not conduct registration as intended in Article 5 paragraph (1). (3) Head of Region shall stipulate Tax payable for PBB-P2 as intended in Article 3 paragraph (3) sub-paragraph c based on SPOP as intended in Article 5 paragraph (1) sub-paragraph b by using SPPT. (4) Head of Region may issue SKPD in the following events: a. SPOP is not conveyed by Taxpayers and after the Taxpayers are warned in writing by Head of Region or by the appointed Officer as determined in the Warning Letter; and/or b. based on the result of Audit or other information it is evident that the amount of Tax payable is larger than the amount of Tax calculated based on SPOP conveyed by Taxpayers. Article 8 (1) The amount of Tax payable for types of Tax collected based on stipulation of Head of Region as intended in Article 3 paragraph (1) and paragraph (3) sub-paragraph a and sub-paragraph b shall be calculated by multiplying Tax tariff and basis of Tax charge.

8 (2) The amount of Tax payable for PBB-P2 as intended in Article 3 paragraph (3) sub-paragraph c shall be calculated by multiplying Tax tariff and basis of Tax charge after reducing non-taxable NJOP. (3) Basis of Tax charge for types of Tax collected based on stipulation of Head of Region as intended in Article 3 paragraph (1) and paragraph (3) shall cover: a. motor vehicle sale value for Motor Vehicle Tax and Duty on Transfer of Ownership of Motor Vehicles; b. surface water acquisition value for Surface Water Tax; c. advertisement rental value for Advertisement Tax; d. groundwater acquisition value for Groundwater Tax; and e. NJOP for PBB-P2. (4) The amount of surface water acquisition value as intended in paragraph (3) sub-paragraph b shall be stipulated in a Governor Regulation. (5) Groundwater acquisition value in Provincial Region shall be stipulated in a Governor Regulation. (6) The amount of groundwater acquisition value as intended in paragraph (3) sub-paragraph d shall be stipulated in a Regent/Mayor Regulation by referring to the groundwater acquisition value stipulated by the Governor. (7) Stipulation of the amount of water acquisition value as intended in paragraph (4) and paragraph (6) shall be conducted by referring to the provisions stipulated by the related technical ministries. Article 9 (1) The amount of Tax payable for types of Tax paid personally based on calculation by Taxpayers as intended in Article 3 paragraph (2) and paragraph (4) sub-paragraph a up to sub-paragraph g shall be calculated by multiplying Tax tariff and basis of Tax charge. (2) The amount of Tax payable for BPHTB as intended in Article 3 paragraph (4) sub-paragraph h shall be calculated by multiplying Tax tariff and basis of Tax charge after reducing non-taxable Tax object acquisition value. (3) Basis of Tax charge for types of Tax paid personally based on calculation by Taxpayers as intended in Article 3 paragraph (2) and paragraph (4): a. motor vehicle fuel sale value before Value Added Tax for Motor Vehicle Fuel Tax; b. excise stipulated by the Government on cigarettes for Cigarette Tax; c. amount of payment or amount that should be paid to a hotel for Hotel Tax;

9 d. amount of payment received or that should be received by a restaurant for Restaurant Tax; e. amount of money received or that should be received by entertainment organizer for Entertainment Tax; f. electric power sale value for Street Lighting Tax; g. sale value of result of excavation of non-metal mineral and rocks for Non-Metal Mineral and Rock Tax; h. amount of payment or amount that should be paid to parking organizer for Parking Tax; i. swallow s nest sale value for Swallow s Nest Tax; and j. Tax object acquisition value for BPHTB. Article 10 (1) Amount of payment to a hotel as intended in Article 9 paragraph (3) sub-paragraph c shall cover: a. Amount of payment after price discount; and b. Amount of payment for purchase of hotel voucher. (2) Amount that should be paid to a hotel as intended in Article 9 paragraph (3) sub-paragraph c shall constitute voucher or any other formats granted free of charge with basis of Tax charge amounting to the applicable price. Article 11 (1) Amount of payment received by a restaurant as intended in Article 9 paragraph (3) sub-paragraph d shall cover: a. Amount of payment after price discount; and b. Amount of purchase using food or beverage voucher. (2) Amount of payment that should be received by a restaurant as intended in Article 9 paragraph (3) sub-paragraph d shall constitute sale price of food or beverage in the event of voucher or any other forms granted free of charge. Article 12 (1) Electric power sale value as intended in Article 9 paragraph (3) sub-paragraph f shall be stipulated: a. for electric power originating from other sources with payment, electric power sale value: 1. amount of billing of load/fixed cost plus cost of consumption of kwh/variable charged in electricity bill, for post-paid electricity bill; and

10 2. amount of electric power purchase. b. for self-generated electric power, electric power sale value shall be calculated based on the available capacity, electricity consumption level, period of electricity consumption, and electricity unit price applicable in the relevant Region. (2) Based on the electric power sale value as intended in paragraph (1) sub-paragraph a, electric power supplier shall conduct calculation and Collection of Street Lighting Tax for electric power usage. Part Two Payment of Tax Payable Article 13 (1) Taxpayers shall pay or deposit Tax payable by using SSPD. (2) Head of Region shall stipulate period for payment or deposit of Tax payable for types of Tax collected based on stipulation of Head of Region as intended in Article 3 paragraph (1) and paragraph (3) a maximum of: a. 1 (one) month as from the date of delivery of SKPD as intended in Article 7 paragraph (1); and b. 6 (six) months as from the receipt of SPPT as intended in Article 7 paragraph (3). (3) Head of Region shall stipulate period for payment or deposit of Tax payable for types of Tax paid personally based on calculation by Taxpayers as intended in Article 3 paragraph (2) and paragraph (4) a maximum of 30 (thirty) workdays after Tax becomes payable. Part Three Tax Reporting Article 14 (1) Taxpayers for types of Tax paid personally based on calculation by Taxpayers as intended in Article 3 paragraph (2) and paragraph (4) shall fill out SPTPD. (2) SPTPD as intended in paragraph (1) shall at least indicate turnover and amount of Tax payable in one Tax period. Article 15 (1) Taxpayers shall convey SPTPD enclosed by SSPD to Head of Region or the appointed Officer for types of Tax paid personally based on calculation by Taxpayers as intended in Article 3 paragraph (2) and paragraph (4). (2) SSPD for BPHTB as intended in Article 3 paragraph (4) sub-paragraph h shall be treated the same as SPTPD. (3) SSPD for BPHTB shall be deemed conveyed after payment is made.

11 (4) SPTPD as intended in paragraph (1) shall be conveyed after the end of Tax period. (5) Head of Region shall conduct Examination on SPTPD and SSPD conveyed by Taxpayers. Part Four Tax Assessment Article 16 (1) Within a period by no later than 5 (five) years as from Tax becomes payable, Head of Region may issue SKPDKB, SKPDKBT, and SKPDN for types of Tax paid personally based on calculation by Taxpayers as intended in Article 3 paragraph (2) and paragraph (4). (2) SKPDKB as intended in paragraph (1) shall be issued in the following events: a. based on the result of Audit or other information, Tax payable is not paid or is underpaid; b. SPTPD as intended in Article 14 paragraph (2) is not conveyed to Head of Region within certain period of time and after being reprimanded in writing it is not conveyed on time as determined in the Warning Letter; or c. the obligation to fill out SPTPD is not fulfilled. (3) Amount of Tax indicated in SKPDKB issued in the event as intended in paragraph (2) sub-paragraph c shall be calculated ex officio. (4) SKPDKBT as intended in paragraph (1) shall be issued in the event that new data and/or previously undisclosed data are found and this causes addition to the Tax payable. (5) SKPDN as intended in paragraph (1) shall be issued in the event that the amount of Tax payable is the same as the amount of Tax credit or Tax is not payable and there is no Tax credit. Article 17 (1) Amount of underpaid Tax payable in SKPDKB as intended in Article 16 paragraph (2) sub-paragraph a and sub-paragraph b shall be subject to administrative sanction in the form of interest of 2% (two percent) per month calculated from Tax which is underpaid or paid late, for a maximum period of 24 (twenty-four) months as from Tax becomes payable. (2) Amount of underpaid Tax payable in SKPDKBT as intended in Article 16 paragraph (4) shall be subject to administrative sanction in the form of increase of 100% (one hundred percent) of the amount of underpaid Tax. (3) The increase as intended in paragraph (2) shall not be charged in the event that Taxpayers report it themselves before Audit action is taken.

12 (4) Amount of Tax payable in SKPDKB as intended in Article 16 paragraph (2) sub-paragraph c shall be subject to administrative sanction in the form of increase of 25% (twenty-five percent) of Tax principal plus administrative sanction in the form of interest of 2% (two percent) per month calculated from Tax which is underpaid or paid late for a maximum period of 24 (twenty-four) months as from Tax becomes payable. (5) SKPDKB as intended in paragraph (1) and SKPDKBT as intended in paragraph (2) must be settled within the period by no later than 1 (one) month as from the date of issuance. Article 18 (1) With regard to Tax overpayment, Taxpayers may file application for refund to Head of Region. (2) Head of Region within the period by no later than 12 (twelve) months as from the receipt of the application for refund of Tax overpayment as intended in paragraph (1) must make a decision. (3) In the event that the period as intended in paragraph (2) has lapsed and Head of Region has not made any decision, the application for refund of Tax overpayment shall be deemed granted and SKPDLB must be issued within the period by no later than 1 (one) month. (4) In the event that Taxpayers have Tax debts, the Tax overpayment as intended in paragraph (1) shall directly be calculated to first settle the aforementioned Tax debts. (5) Refund of Tax overpayment as intended in paragraph (1) shall be made within the period by no later than 2 (two) months as from the issuance of SKPDLB. (6) In the event that the refund of Tax overpayment is made after the lapse of 2 (two) months, Head of Region shall give interest reward amounting to 2% (two percent) per month for the late refund of Tax overpayment. CHAPTER V COLLECTION DAN NULLIFICATION OF TAX RECEIVABLES Part One Tax Collection Article 19 (1) Head of Region may issue STPD for types of Tax collected based on stipulation of Head of Region as intended in Article 3 paragraph (1) and paragraph (3) in the following events: a. Tax payable in SKPD or SPPT which is not paid or which is underpaid after the maturity date of payment; b. Decision on Correction, Decision on Objection, and Appeal Decision which is not paid or which is underpaid after the maturity date of payment; or

13 c. Taxpayers are subject to administrative sanction in the form of interest and/or fine. (2) The amount payable in STPD as intended in paragraph (1) sub-paragraph a, shall be Tax principal which is underpaid plus administrative sanction in the form of interest amounting to 2% (two percent) per month. (3) The amount payable in STPD as intended in paragraph (1) sub-paragraph b, shall be Tax principal which is underpaid plus administrative sanction in the form of interest amounting to 2% (two percent) per month for a maximum of 15 (fifteen) months as from Tax becomes payable. Article 20 (1) Head of Region or the appointed Officer may issue STPD for types of Tax paid personally based on calculation by Taxpayers as intended in Article 3 paragraph (2) and paragraph (4) in the following events: a. Based on the result of Examination of SPTPD there is underpayment due to typographical error and/or miscalculation; b. SKPDKB, SKPDKBT, Decision on Correction, Decision on Objection, and Appeal Decision which is not paid or which is underpaid after the maturity date of payment; or c. Taxpayers are subject to administrative sanction in the form of interest and/or fine. (2) The amount payable in STPD as intended in paragraph (1) sub-paragraphs a and b, shall be Tax principal which is underpaid plus administrative sanction in the form of interest amounting to 2% (two percent) per month for a maximum of 15 (fifteen) months as from Tax becomes payable. Article 21 (1) Tax payable based on SPPT, SKPD, SKPDKB, SKPDKBT, STPD, Decision on Correction, Decision on Objection, and Appeal Decision which is not paid or which is underpaid by Taxpayers on time may be collected using Distress Warrant. (2) Tax Collection using Distress Warrant shall be implemented based on the provisions of laws and regulations. (3) Provisions regarding guidelines for Collection shall be stipulated in a Regulation of the Minister of Finance with the consideration of the minister in charge of home affairs. Part Two Nullification of Tax Receivables Article 22 (1) Tax receivables that cannot possibly be collected anymore because the right to conduct Collection has expired may be nullified.

14 (2) Expiry of Tax Collection as intended in paragraph (1) shall be postponed in the following events: a. Warning Letter and/or Distress Warrant is issued; or b. there is acknowledgment of Tax indebtedness by Taxpayers, whether directly or indirectly. (3) Direct acknowledgment of Tax indebtedness as intended in paragraph (2) sub-paragraph b shall be when Taxpayers at their own will state that they still have Tax debts and have not settled them to the Regional Government. (4) Indirect acknowledgment of Tax indebtedness as intended in paragraph (2) sub-paragraph b may be known from the filing of application for payment in installments or postponement of payment and application of objection by Taxpayers. (5) In the event of issuance of Warning Letter and/or Distress Warrant as intended in paragraph (2) sub-paragraph a, expiry of Collection shall be calculated as from the date of conveyance of such Warning Letter and/or Distress Warrant. (6) In the event of acknowledgment of Tax indebtedness by Taxpayers as intended in paragraph (2) sub-paragraph b, expiry of Collection shall be calculated as from the date of such acknowledgment. (7) Further provisions regarding procedure for nullification of Tax receivables as intended in paragraph (1) shall be stipulated in a Regulation of the Head of Region. CHAPTER VI OBJECTION AND APPEAL Article 23 (1) Taxpayers may file objection to Head of Region or the appointed Officer to SPPT, SKPD, SKPDKB, SKPDKBT, SKPDLB, SKPDN, and withholding or Collection by a third party. (2) The filing of objection as intended in paragraph (1) must be conducted within the period by no later than 3 (three) months as from the date of letter or the date of withholding or Collection. (3) In the event that Taxpayers can show that the period cannot be fulfilled due to conditions beyond his power, the objection as intended in paragraph (2) may be filed within the period of more than 3 (three) months. (4) Objection may be filed if Taxpayers have paid at least the amount agreed by Taxpayers. (5) In the event that Taxpayers file an objection, the period for settlement of the amount of Tax not yet paid at the time of filing the objection shall be postponed up to 1 (one) month as from the date of issuance of Decision on Objection. (6) Objection shall be filed in accordance with the provisions of laws and regulations.

15 Article 24 (1) Head of Region or the appointed Officer must make a decision on the objection filed by Taxpayers as intended in Article 23 paragraph (1). (2) In making a decision as intended in paragraph (1), Head of Region or the appointed Officer may conduct an Audit. (3) Decision of the Head of Region or the appointed Officer as intended in paragraph (2) must be conducted within the period by no later than 12 (twelve) months as from the receipt of letter of objection. (4) Decision of the Head of Region or the appointed Officer on the objection may be in the form of: a. accepting entirely in the event that Tax payable based on the result of Audit is the same as Tax payable according to Taxpayers; b. accepting partly in the event that Tax payable based on the result of Audit is partly the same as Tax payable according to Taxpayers; c. rejecting in the event that Tax payable based on the result of Audit is the same as Tax payable in decision/assessment subject to objection by Taxpayers; or d. adding the amount of Tax payable in the event that Tax payable based on the result of Audit is larger than Tax payable in decision/assessment subject to objection by Taxpayers. (5) In the event that the period as intended in paragraph (1) has lapsed and Head of Region does not make any decision, the objection filed shall be deemed accepted. (6) Further provisions regarding procedure for settlement of objection shall be stipulated in a Regulation of the Head of Region. Article 25 (1) Taxpayers may file an appeal against Decision on Objection stipulated by Head of Region as intended in Article 24 paragraph (3) by no later than 3 (three) months as from the decision is received by enclosing a copy of such Decision on Objection. (2) The filing of appeal as intended in paragraph (1) shall postpone the obligation to pay Tax up to 1 (one) month as from the date of issuance of Appeal Decision. (3) The filing of appeal shall be implemented in accordance with the provisions of laws and regulations. Article 26 (1) In the event that the filing of objection or appeal is accepted partly or entirely, Tax overpayment shall be refunded plus interest reward amounting to 2% (two percent) per month for a maximum of 24 (twenty-four) months.

16 (2) Interest reward as intended in paragraph (1) shall be calculated as from the month of settlement up to the issuance of SKPDLB. (3) In the event that objection of Taxpayers is rejected or accepted partly, Taxpayers shall be subject to administrative sanction in the form of fine amounting to 50% (fifty percent) of the amount of Tax based on decision on objection minus Tax already paid before filing the objection. (4) In the event that Taxpayers file an appeal, administrative sanction in the form of fine amounting to 50% (fifty percent) as intended in paragraph (3) shall not be charged. (5) In the event that appeal is rejected or accepted partly, Taxpayers shall be subject to administrative sanction in the form of fine amounting to 100% (one hundred percent) of the amount of Tax based on Appeal Decision minus Tax payment already made before filing the objection. CHAPTER VII BOOKKEEPING AND AUDIT Article 27 (1) Taxpayers conducting business with a turnover of at least Rp ,00 (three hundred million Rupiah) per year must maintain bookkeeping or recording. (2) Bookkeeping or recording as intended in paragraph (1) shall at least contain data on sales as well as its supporting proof thus the amount of Tax payable can be calculated. Article 28 (1) Head of Region or the appointed Officer shall be authorized to conduct Audit to test the compliance in fulfillment of Regional taxation obligations and for other purposes in the context of implementing the provisions of laws and regulations. (2) Audited Taxpayers must: a. show and/or lend books or records, documents constituting basis thereof, and other documents related to Tax objects payable; b. provide opportunity to enter place or room deemed necessary and provide assistance for the smooth running of Audit; and/or c. provide the necessary information. (3) In the event that Taxpayers do not fulfill the obligations as intended in paragraph (2), the amount of Tax payable shall be stipulated ex officio. (4) Provisions regarding guidelines for Audit shall be stipulated in a Regulation of the Minister of Finance after obtaining recommendation from the ministry in charge of home affairs. CHAPTER VIII

17 EXAMINATION OF REGIONAL TAX PAYMENT FORM OF DUTY FOR THE ACQUISITION OF RIGHTS TO LAND AND BUILDING Article 29 (1) Examination of SSPD BPHTB shall cover: a. Suitability between number of Tax objects indicated in SSPD BPHTB and number of Tax objects indicated in the photocopy of SPPT or other proof of payment of PBB-P2 and in the database of PBB-P2; b. Suitability between NJOP of land per square meter indicated in SSPD BPHTB and NJOP of land per square meter in the database of PBB-P2; c. Suitability between NJOP of building per square meter indicated in SSPD BPHTB and NJOP of building per square meter in the database of PBB-P2; d. Accuracy of calculation of BPHTB which covers Tax object acquisition value, NJOP, non-taxable NJOP, tariff, charging of certain Tax objects, BPHTB payable or to be paid; and e. Accuracy of calculation of BPHTB deposited, including the amount of self-calculated reduction. (2) Certain Tax objects as intended in paragraph (1) sub-paragraph d shall cover acquisition of rights due to inheritance and testamentary grant. (3) Process of Examination of SSPD BPHTB as intended in paragraph (1) shall be conducted by no later than 1 (one) workday as from the complete receipt of SSPD BPHTB for Examination on site. (4) In the event that based on the result of Examination of SSPD BPHTB as intended in paragraph (1) the amount of Tax deposited is smaller than the amount of Tax payable, Taxpayers must settle the underpayment. CHAPTER IX ASSESSMENT OF LAND AND BUILDING TAX OF RURAL AND URBAN SECTOR Article 30 (1) Head of Region shall stipulate NJOP. (2) The amount of NJOP as intended in paragraph (1) shall be stipulated every 3 (three) years, except for certain Tax objects which may be stipulated every year in accordance with the area s development. (3) NJOP as intended in paragraph (1) shall be calculated based on the average prices obtained from sale-purchase transactions that occur fairly. (4) In the event that the average prices as intended in paragraph (3) are not obtained, NJOP may be calculated by the following methods: a. comparing prices with other similar objects;

18 b. new acquisition value; or c. substitute sale value. (5) Calculation of NJOP as intended in paragraph (3) and (4) shall be conducted through assessment. (6) Further provisions regarding assessment as intended in paragraph (5) shall be stipulated in a Regulation of the Minister of Finance after obtaining consideration from the minister in charge of home affairs. CHAPTER X TAX PAID OR COLLECTED BY THE GOVERNMENT Article 31 (1) Types of Tax that may be paid by the Government shall cover: a. Surface Water Tax; b. Groundwater Tax; and c. Street Lighting Tax. (2) Tax that may be paid by the Government as intended in paragraph (1) shall be applicable to Taxpayers signing agreement with the Government in the field of natural oil and gas upstream business or in other business fields which stipulates that the Tax payable shall be exempted and borne by the Government. (3) Tax that may be paid by the Government as intended in paragraph (1) shall originate from certain amount constituting portion of state revenues on every business activity as intended in paragraph (2). (4) Tax payment as intended in paragraph (3) shall be made by the Government in this case the Minister of Finance in accordance with basis of Tax charge stipulated by the Head of Region. (5) Basis of Tax charge as intended in paragraph (4) for the types of Tax as intended in paragraph (1) sub-paragraph a and sub-paragraph b shall constitute water acquisition value. (6) Water acquisition value as intended in paragraph (5) shall be stipulated with the following provisions: a. Peraturan Gubernur Governor Regulation regarding surface water acquisition value shall be stipulated in reference to the provisions stipulated by the minister in charge of governmental affairs in the field of public works; and/or b. Regent/Mayor Regulation regarding groundwater acquisition value shall be stipulated in reference to Governor Regulation regarding groundwater acquisition value. (7) Governor Regulation regarding groundwater acquisition value as intended in paragraph (6) sub-paragraph b shall be stipulated based on the provisions

19 stipulated by the minister in charge of governmental affairs in the field of energy and mineral resources. (8) The amount of Tax paid by the Government in this case the Minister of Finance as intended in paragraph (4) shall constitute multiplication result of Tax tariff stipulated in Regional Regulation and basis of Tax charge as intended in paragraph (5). (9) Further provisions regarding procedure for Tax payment as intended in paragraph (1) shall be stipulated in a Regulation of the Minister of Finance. Article 32 (1) Cigarette Tax as intended in Article 3 paragraph (2) sub-paragraph b shall be collected at the same time as the Collection of cigarette excise by the Government agency authorized to collect excise. (2) The amount of Tax payable for Cigarette Tax shall be calculated by Taxpayers amounting to 10% (ten percent) of the amount of cigarette excise. (3) Revenues from Cigarette Tax as intended in paragraph (1) shall be deposited to the general treasury account of the Province proportionately based on the number of population. (4) Further provisions regarding procedure for Collection and deposit of Cigarette Tax shall be stipulated in a Regulation of the Minister of Finance. Article 33 (1) Revenues from Cigarette Tax deposited to the general treasury account of the Province as intended in Article 32 paragraph (3) shall be distributed with the following proportions: a. 30% (thirty percent) for the relevant province; and b. 70% (seventy percent) to be distributed to the regencies/cities in the relevant province. (2) Revenues from Cigarette Tax as intended in paragraph (1), both the portion of the province as well as the portion of the regencies/cities shall be allocated at least 50% (fifty percent) to fund public health services and law enforcement by the relevant authorities. (3) Public health services as intended in paragraph (2) shall cover public health services as stipulated in the provisions of laws and regulations regarding Regional Taxes and Regional levies. (4) Law enforcement as intended in paragraph (2) shall be implemented in accordance with the authority of the Regional Government that can be in cooperation with other parties/agencies. (5) Provisions regarding public health services funded by Cigarette Tax shall be stipulated in a Regulation of the Minister of Health after coordinating with the minister in charge of home affairs and the minister in charge of governmental affairs in the field of finance.

20 CHAPTER XI CLOSING PROVISIONS Article 34 As this Government Regulation comes into effect, all Laws and Regulations related to Regional Taxes, shall be declared still applicable insofar as not contrary to or have not been replaced by new regulations based on this Government Regulation. Article 35 As this Government Regulation comes into effect, Government Regulation of the Republic of Indonesia Number 91 Year 2010 regarding Types of Regional Taxes Collected Based on Stipulation of Head of Region or Paid Personally by Taxpayers (State Gazette of the Republic of Indonesia Year 2010 Number 153, Supplement to State Gazette Number 5179) shall be revoked and declared null and void. Article 36 Implementation regulations of this Government Regulation shall be stipulated by no later than 1 (one) year as from the promulgation of this Government Regulation. Article 37 This Government Regulation shall come into effect as from the date of its promulgation. For public cognizance, hereby ordering the promulgation of this Government Regulation by placing it in the State Gazette of the Republic of Indonesia. Stipulated in Jakarta On 21 November 2016 THE PRESIDENT OF THE REPUBLIC OF INDONESIA, Signed JOKO WIDODO Promulgated in Jakarta On 22 November 2016 THE MINISTER OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA, Signed YASONNA H. LAOLY STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 244 Issued as true copy THE MINISTRY OF STATE SECRETARIAT OF THE REPUBLIC OF INDONESIA Assistant Deputy of Economy, Deputy of Law and Legislation, Signed and stamped Lydia Silvanna Djaman

21 ELUCIDATION ON GOVERNMENT REGULATION OF THE REPUBLIC OF INDONESIA NUMBER 55 YEAR 2016 REGARDING GENERAL PROVISIONS AND PROCEDURES FOR COLLECTION OF REGIONAL TAXES I. GENERAL Principally, Law Number 28 Year 2009 regarding Regional Taxes and Regional Levies has stipulated policies on Regional taxes and levies, including several provisions on the implementation of Tax collection. Several other provisions with regard to the implementation process of Tax collection by the Regional Government can be stipulated by the Regions themselves in the form of Regional Regulation, Regulation of the Head of Region and/or other implementation regulations. This is intended to ensure that the Regional Government has discretion and freedom in building Tax collection system and procedure in accordance with the relevant Region s conditions and characteristics by still being based on higher legislation. In the implementation of Tax collection in the Regions, there are still difficulties faced by the Regions related to technical issues of Tax collection considering that laws and regulations regarding technical issues of Tax collection are still incomplete. Furthermore, there are different interpretations between Taxpayers and the Regional Government as well as between Regional Governments with regard to several provisions in Law Number 28 Year 2009 regarding Regional Taxes and Regional Levies. Such different interpretations are, among other things, provisions regarding Tax Period, stipulation of Taxpayers, Tax Examination, and Tax Collection. Considering that Government Regulation Number 91 Year 2010 regarding Types of Regional Taxes Collected Based on Stipulation of Head of Region or Paid Personally by Taxpayers only regulates classification of types of Tax based on the collection, then to provide technical guidelines for the implementation of Tax Collection and to clarify the meaning of various provisions in Law Number 28 Year 2009 regarding Regional Taxes and Regional Levies, it is necessary to prepare Government Regulation to replace Government Regulation Number 91 Year 2010 regarding Types of Regional Taxes Collected Based on Stipulation of Head of Region or Paid Personally by Taxpayers. In addition, this Government Regulation is intended to provide clearer arrangement with regard to specific Tax Collection, among other things types of Tax the payment of Tax payable of which is charged to the Government namely for Taxpayers who sign an agreement with the Government in the field of natural oil and gas upstream business activities which stipulates that the Tax payable thereon shall be paid by the Government. Basis of Tax charge is one of the main components in the calculation of Tax payable. Law Number 28 Year 2009 regarding Regional Taxes and Regional Levies has mandated that the stipulation of basis of Tax charge constitutes the authority of Regional Government. The implementation of this authority must be in accordance with the principal norms stipulated by Law Number 28 Year 2009 regarding Regional Taxes and Regional Levies.

22 Basis of PBB-P2 charge is NJOP stipulated by Head of Region. NJOP is obtained by assessment calculated based on the average prices obtained from sale-purchase transactions occurring fairly. In the event that the average prices are not obtained, NJOP may be calculated using the method of comparing prices with other similar objects, new acquisition value, or substitute sale value. To ensure that Head of Region can stipulate NJOP fairly and accountably, this Government Regulation states that further provisions regarding the assessment shall be stipulated in a Regulation of the Minister of Finance. Furthermore, in order to support the implementation of Tax Collection, strengthen law enforcement on regional taxation, and ensure the implementation of Taxpayers rights and obligations, this Government Regulation also states that provisions regarding guidelines for Tax Audit and Tax Collection by Distress Warrant shall be stipulated in a Regulation of the Minister of Finance. II. ARTICLE BY ARTICLE Article 1 Article 2 Article 3 Sub-paragraph a Referred to as "Motor Vehicle Tax" shall be Tax on ownership and/or possession of motor vehicles. Sub-paragraph b Referred to as "Duty on Transfer of Ownership of Motor Vehicles" shall be Tax on delivery of motor vehicle proprietary right due to bilateral agreement or unilateral deed or condition that occurs because of sale-purchase, exchange, grant, inheritance, or participation in a business entity. Sub-paragraph c Referred to as "Surface Water Tax" shall be Tax on the taking and/or utilization of surface water. Sub-paragraph a Referred to as "Motor Vehicle Fuel Tax" shall be Tax on the use of motor vehicle fuel. Sub-paragraph b Referred to as "Cigarette Tax" shall be levy on cigarette excise collected by the Government. Paragraph (3) Sub-paragraph a Referred to as "Advertisement Tax" shall be Tax on the organizing of advertisements.

23 Sub-paragraph b Referred to as "Groundwater Tax" shall be Tax on the taking and/or utilization of groundwater. Sub-paragraph c Paragraph (4) Sub-paragraph a Referred to as "Hotel Tax" shall be Tax on services provided by a hotel. Sub-paragraph b Referred to as "Restaurant Tax" shall be Tax on services provided by a restaurant. Sub-paragraph c Referred to as "Entertainment Tax" shall be Tax on the organizing of entertainment. Sub-paragraph d Referred to as "Street Lighting Tax" shall be Tax on the use of electric power, whether self-generated or obtained from other sources. Sub-paragraph e Referred to as "Non-Metal Mineral and Rock Tax" shall be Tax on the taking of non-metal mineral and rocks, namely from natural resources inside and/or on the surface of the earth to be utilized. Excluded from the activities of taking non-metal mineral and rocks shall be: 1. taking of non-metal mineral and rocks which actually are not commercially utilized; 2. taking of non-metal mineral and rocks constituting by-products of other mining activities, and not commercially utilized; and 3. other taking of non-metal mineral and rocks stipulated in a Regional Regulation. Referred to as commercial utilization shall be utilization which provides economic added value whether for sale, to be utilized personally, or to be utilized by other parties which are not for social interests in certain limit of volume stipulated by the Head of Region. Sub-paragraph f Referred to as "Parking Tax" shall be Tax on the organizing of parking spaces outside the road, whether those made available in relation to core business or those made available as a business, including the provision of motor vehicle depository place. Sub-paragraph g Referred to as "Swallow s Nest Tax" shall be Tax on the activities of taking and/or business of swallow s nests.

24 Article 4 Sub-paragraph h Article 5 Registration of Tax objects shall be intended to assist Head of Region in stipulating tax payable. Included in registration of Tax objects shall be among other things: a. utilization of surface water and groundwater; and b. organizing of advertisements. Referred to as "Regional Taxpayer registration number" shall be the number granted to Taxpayers as facility in regional taxation administration used as identity of Taxpayers in implementing their taxation rights and obligations. Paragraph (3) Paragraph (4) Article 6 Referred to as "Tax Period" shall be the period of 1 (one) calendar month or other period stipulated in a Regulation of the Head of Region a maximum of 3 (three) calendar months constituting basis for Taxpayers to calculate, deposit, and report Tax payable. Article 7 Paragraph (3) Paragraph (4) Referred to as "other information" shall be filing by Taxpayers. Article 8

25 Paragraph (3) Paragraph (4) Paragraph (5) Paragraph (6) Paragraph (7) Referred to as "the related technical ministries" shall be: a. technical ministry in charge of governmental affairs in the field of public works for surface water acquisition value; and b. technical ministry in charge of governmental affairs in the field of energy and mineral resources for groundwater acquisition value. Article 9 Article 10 Referred to as "other forms" shall be among other things in the form of invitation from the hotel to hotel service recipients whether verbally or in writing. Article 11 Referred to as "other forms" shall be among other things in the form of invitation from the restaurant to restaurant service recipients whether verbally or in writing. Article 12 Sub-paragraph a Referred to as "electric power originating from other sources" shall be electric power obtained from electric power provider. Referred to as "amount of electric power purchase" shall be the amount paid by electric power users for the purchase of pre-paid electric power.