Learn about the various main functions of NPWP for taxpayers which help avoid fines, simplify credit applications, and various other administrative conveniences.
Taxpayer Identification Number (NPWP) is an official identity given to individuals or legal entities registered as taxpayers in Indonesia.
NPWP has many benefits, which are not only limited to the obligation to pay taxes, but also has many functions that facilitate various administrative and business activities.
For those of you who do not fully understand the important role of NPWP, here are 10 main functions of NPWP that you must know.
1. Avoid Tax Fines
One of the main functions of NPWP is to prevent you from fines or administrative sanctions related to tax obligations.
With NPWP, you are legally registered as a taxpayer who has an obligation to pay taxes in accordance with applicable provisions.
Using NPWP, you will get a reminder to pay taxes on time, so there is no reason to be late and be subject to fines or late interest.
If you do not have a NPWP Online, you will be considered not registered as a taxpayer and will not be recorded in the country’s tax system.
This is a big risk because it can result in quite high fines or administrative sanctions. Therefore, having a NPWP is not only about complying with the law, but also to avoid potential financial problems due to unpaid taxes on time.
2. Make it easier to apply for credit
NPWP is also very important to facilitate credit applications at financial institutions, such as banks.
NPWP is one of the mandatory requirements in various types of credit applications, such as Home Ownership Credit (KPR), Unsecured Credit (KTA), to credit cards.
The bank will look at the customer’s tax compliance track record before deciding on a credit application.
With NPWP, you show that you are a compliant taxpayer, which of course increases the trust of banks or other financial institutions.
Without NPWP, your credit application can be hampered, and the process becomes more complicated and takes longer. Therefore, having NPWP makes it easier for you to access the desired financial products.
3. Assist in making business licenses
For those of you who are planning to open a business, NPWP is one of the requirements that is absolutely necessary.
To obtain a Trade Business License (SIUP) or other business permits, every business is required to register as a taxpayer. Without a NPWP, you cannot obtain a valid business license, which risks hampering business operations.
NPWP is a sign that the business is properly registered in the tax system, which makes the legality of your business clearer and more legitimate in the eyes of the law. By having a NPWP, you can continue the process of making a business license without any obstacles.
4. Open a Bank Account
NPWP is also a requirement for opening a bank account in Indonesia, both for individuals and business entities.
Bank Indonesia regulations on preventing money laundering and terrorist financing require prospective customers to submit NPWP when opening an account.
This aims to ensure that banks can ensure that transactions made by their customers are properly recorded and not used for illegal activities.
The importance of NPWP in opening a bank account is to comply with existing regulations, as well as to ensure that financial transactions carried out are recorded legally and transparently.
5. Conditions for Disbursement of State Project Funds
For those of you involved in government projects, such as auctions or tenders, NPWP is one of the important requirements to follow the fund disbursement process.
Projects involving government funds, be it auctions of goods, services, or construction projects, require participants to have NPWP.
This applies to various forms of projects, both those held by the central and regional governments. Without a NPWP, you will not be able to access funds from the project. Thus, NPWP also functions as access to obtain funds from state projects.
6. Tax Refund Submission
NPWP also plays an important role in the process of filing a tax refund. When you pay more than the amount of tax you should, the NPWP is used to process the refund through the tax office. This refund process becomes easier and faster if you are registered in the tax system.
If you work as an employee or freelancer, your NPWP allows you to claim a tax refund for excess tax withheld from your income. This function helps you to get back the tax rights that have been overpaid.
7. Starting a New Business or Company
As a prospective entrepreneur or business entity who wants to start a new business in Indonesia, NPWP is a requirement that must be owned.
Without NPWP, you cannot register your business, open a company account, and undergo other business administration.
Businesses that do not have NPWP can be considered illegal and do not fulfill their tax obligations, which can hinder business development.
NPWP is also important so that your business gets legal protection and can operate legally in Indonesia. Therefore, for those of you who intend to start a new business, having a NPWP is the first step that must be fulfilled.
8. Facilitates Tax Administration
NPWP functions as a taxpayer identity that simplifies all administrative matters related to taxes. With NPWP, you can easily access various information related to tax obligations, starting from filling out the SPT (Annual Tax Return), paying taxes, to verifying your tax status.
This makes your tax administration run more smoothly and in accordance with the provisions.
The existence of NPWP also helps you avoid errors in tax reporting, ensuring all your obligations are met correctly and on time.
9. Online Tax Payment
The Indonesian government has provided an e-filing and e-billing system to facilitate taxpayers in making payments and reporting taxes online.
With a registered NPWP, you can take advantage of this facility to pay taxes quickly and efficiently, without having to queue at the tax office.
This function is very useful for busy taxpayers, because they can report and pay taxes from anywhere and anytime, as long as they are connected to the internet. Online tax payments with NPWP are a more practical and effective way.
10. Other Administrative Facilities
NPWP not only functions for taxation matters, but also facilitates various other administrative matters. In the process of applying for loans, opening accounts, registering businesses, and other transactions involving finance, NPWP is a legal and important requirement.
This makes it easier for you to carry out various transactions that require administrative verification.
By having a NPWP, you will find it easier to carry out economic and business activities, because many processes require it as a requirement.
In conclusion, NPWP is more than just a tool for paying taxes. NPWP also provides various important benefits that facilitate various administrative activities, both in personal, financial and business life.
From avoiding fines to making it easier to apply for credit and open a business, NPWP is an important requirement that must be owned by every individual and business entity registered in Indonesia.
Create NPWP Online services make the registration process more accessible and efficient. Make sure you have a valid NPWP to enjoy the various conveniences and benefits offered.
