The Restriction of Interest Compensation under Article 27B(2) of the Indonesian General Taxation Law and Its Implications

The amendment of the General Provisions and Tax Procedures Law (UU KUP) through the replacement of Article 27A with Article 27B has narrowed taxpayers’ rights to receive interest compensation (imbal bunga) in cases of tax overpayment. Under Article 27B (2), interest compensation is only granted for overpayments originating from refund requests on tax returns (SPT Lebih Bayar) and limited to the amount approved during the Final Discussion of Audit Results (PAHP). This normative juridical research examines the fairness and legal implications of such limitations by analyzing statutory provisions, doctrinal interpretations, and the principles of legal certainty and equality before the law. The findings indicate that the restriction creates a substantive imbalance: when taxpayers lose in a dispute, the state imposes substantial penalties, yet when taxpayers win, they receive no compensation for the funds held by the state during the litigation period. This asymmetry undermines the corrective justice principle and may erode taxpayers’ trust in the tax administration. The study concludes that Article 27B(2) should be reconsidered to ensure a more equitable balance between taxpayer rights and state authority by expanding the scope of interest compensation to include all tax overpayments arising from dispute resolutions. Such reform would enhance fairness, accountability, and the integrity of Indonesia’s tax system.