Indonesia’s Directorate General of Taxes (DGT) has once again demonstrated its commitment to enforcing tax compliance. Investigators from the Regional Office of the Directorate General of Taxes (DJP) Banten arrested five executives from steel and iron companies for allegedly committing tax fraud that caused estimated state losses of Rp583.26 billion.

The case is part of an ongoing investigation following a raid conducted on February 5, 2026, which was attended by the Minister of Finance and the Director General of Taxes.

Alleged Tax Fraud Scheme

The five suspects, identified by the initials RS, CX, GM, HQ, and LCH, were reportedly company executives, shareholders, and controlling parties of PT PSI, PT PSM, and PT VPM — companies operating in the steel and iron industry in Banten Province.

According to the Regional Tax Office, the suspects allegedly committed several tax violations between January 2016 and December 2019, including:

• Filing inaccurate or incomplete VAT returns
• Conducting sales without issuing tax invoices
• Concealing sales transactions
• Receiving payments through third-party nominee accounts instead of official company accounts

These actions were allegedly carried out to evade Value Added Tax (VAT) obligations.

Potential Criminal Penalties

The suspects have been charged under Article 39 paragraph (1) letter d of Indonesia’s General Tax Provisions and Procedures Law (UU KUP). The penalties may include:

• Imprisonment ranging from 6 months to 6 years
• Fines of at least two times and up to four times the amount of unpaid taxes

Stronger Tax Law Enforcement

The arrests were carried out through a joint operation involving investigators from DJP Banten, the Special Crimes Directorate of Metro Jaya Police, Banten Police, the Banten High Prosecutor’s Office, and the Tangerang District Court. This case serves as a reminder for businesses to fulfill their tax obligations transparently and in accordance with prevailing regulations. The government continues to strengthen supervision and law enforcement efforts to ensure a fair taxation system and protect state revenue.