Obtaining a Bank Account, Tax Number & BPJS-K

Living and working in Indonesia, there are always challenges in meeting the changing requirements of the bureaucracy.

Some of these are much simpler to deal with than others.

One of the first things any newly arrived expatriate in Indonesia needs to do is open a local bank account. Decades ago, this could be a slow process, but it can now be done within half an hour, provided you have the requisite documents.

In general, you should bring your passport, your KITAS (temporary stay permit) or whatever visa you have, a letter of domicile, and a letter of recommendation from your employer or sponsor or local spouse. Photocopies of these documents will also be useful. You’ll also need to bring some cash for a minimum deposit; Rp.100,000 should be sufficient. Then there’s a form to fill in and sign (use a black pen), and you should soon be handed a passbook and an ATM card.

A note on obtaining a letter of domicile (which is also a prerequisite for obtaining and extending a KITAS); if you live in an apartment, the building management should issue one free of charge. If you’re renting a house, your local neighbourhood association chief (known locally as Pak RT or Pak RW) should issue one, provided you show your rental agreement – or your pleasant personality may be sufficient. A blue duty stamp token called a materai may need to be affixed to the letter for it to be deemed legal. These stamps can be purchased for Rp.6,000 at any post office or for more elsewhere.

If you lack one of the aforementioned documents at the bank, you might be able to show an Indonesian Taxpayer Identification Number (Nomor Pokok Wajib Pajak, NPWP) or an Indonesian driving license. Or you could just politely persist until you get a result. I’ve managed to open accounts with only a passport and a KITAS, but some people say more is required.

Sometimes, bank staff may put up hurdles, claiming “you can only open an account at the branch nearest to your workplace,” so you trek over there, only to be told, “you have to visit the branch nearest to your residence”. Whatever happens, keep smiling and politely request to talk to a senior staff member, who may be more helpful.

Indonesia’s leading private bank is Bank Central Asia (BCA) as it has the most branches and ATMs. Then there are three main state-owned banks: Mandiri, Bank Rakyat Indonesia (BRI) and Bank Nasional Indonesia (BNI). It doesn’t hurt to have an account with a private bank for convenience and also with a state-owned bank, as this can help you obtain compulsory social health insurance.

All banks impose monthly account fees of about Rp.5,000 to Rp.20,000. Your account may be closed if inactive for over three months or if funds are depleted. Only about 50 percent of Indonesians have bank accounts, so as part of an initiative to encourage greater saving, local banks are required to offer no-frills accounts with zero administrative fees, but these are not widely utilized as they do not offer ATM cards.

Dealing with Tax

Expatriates working in Indonesia face the unwelcome prospect of having their earnings taxed by 20 percent, on top of regular taxes, if they are unable to provide an NPWP.

The Taxpayer Identification Number was mandated under a 1983 tax law but few Indonesians or foreigners had one in the 1980s and 1990s. Instead, some companies made unofficial deals with tax officials. When an Indonesian or an expatriate attempted to leave the country and could not show an NPWP, they would have to pay a “fiscal tax” of Rp.1 million. This tax was abolished in 2011, while the government stepped up its campaign to increase the number of taxpayers.

Expatriates living at least 183 days per year in Indonesia are required to obtain an NPWP. The good news is that your employer should take care of your taxes, most likely through monthly deductions, but the individual taxpayer is legally responsible for ensuring registration with the tax office and filing an annual tax return.

If you’re in Jakarta and you need an NPWP for individual income tax, the process is incredibly simple and easy (for Indonesia) and does not require the services of an agent.

You might be thinking: Indonesian bureaucracy is notoriously slow and difficult, so why not pay an agent to do the legwork and waiting? If you’ve ever tried to extend a visa without paying an agent to facilitate the process, you may have suffered long waiting periods. It’s not uncommon for immigration offices to send you to five counters for paperwork, photocopying, photos, fingerprinting and payment, a process so long that by the time the clock shows 11:40 am, staff may tell you to come back after 1 pm because they want to start their lunch break. And then you’re told to come back three days later.

Visiting the Tax Office for Foreign Agencies and Foreigners (KPP Badan dan Orang Asing) in Kalibata, South Jakarta, is a refreshingly different experience. The location is Jalan Raya Kalibata, a few hundred metres east and opposite the massive National Heroes Cemetery. It’s just a two-minute westward walk from Duren Kalibata train station. Operating hours are from 8 am to 4 pm. Staff take staggered lunch breaks, so if you’re there at midday, you won’t be told to come back later.

Upon arrival at the main building, there are left and right wings. Enter through the left-side doors, then take a number from the automated machine. Unlike such machines in other government offices, this one always seems to be working, so there is no queue-jumping. The waiting area, equipped with comfortable sofas, is more like a luxurious hotel lobby than a government office. There’s even a computer and printer corner, if you need to plug in a USB drive to print something.

There are no agents swarming all over the place. No one is furtively or blatantly pressing rupiah into the hands of officials in return for service. The woman who served me was proud that the Tax Office is under the domain of Finance Minister Sri Mulyani Indrawati, who enjoys a reputation for efficiency and honesty.

On my visit, I only had to wait for eight minutes before my number came up.

Then it was a simple matter of handing over: a photocopy of my passport’s data page, a photocopy of my KITAS and a letter from my employer (surat keterangan dari pemberi kerja). A few minutes later, the paperwork was complete and the Tax Office mailed my NPWP to my employer.

If you have not yet obtained an NPWP, perhaps you’re afraid that registration will lead to massive tax bills. As long as your employer makes monthly deductions and you file an annual return, you should have little to worry about. But if you’re worried about being stung for foreign income or wondering about deductions, you should seek guidance from a tax accountant.

Personal income tax rates are as follows:

BPJS Cards

BPJS is the government’s Social Insurance Administration Organization (Badan Penyelenggara Jaminan Sosial), which comes in two forms: BPJS Kesehatan (Health) and BPJS Ketanagakerjaan (Employment). The two-state insurance firms were formed under a 2011 law on social security.

According to the Manpower Ministry, it is now compulsory for expatriates to have both types of BPJS cards. If you’re working, your employer is required to take care of the paperwork. Otherwise, you have to visit your local BPJS office, fill in the necessary forms and provide photocopies of your passport and any other local ID, as well as two 3x4cm photos, a phone number and an email address. You also need to have a bank account with Mandiri, BNI or BRI.

The monthly premiums are Rp.80,000 for Class I, Rp.51,000 for Class II and Rp.25,500 for Class III. These entitle you to different classes of hospital rooms, where treatment is supposed to be the same regardless of the room type.

A visit to your local BPJS office makes an interesting cultural experience. At mine in West Jakarta, where the initial paperwork was issued and processed outdoors, I seemed to have arrived in the middle of a spitting competition. Staff were extremely helpful and efficient, although there were a few queue-jumpers and the forms were somewhat cramped.

If you don’t fancy such a visit, you can register online:

https://bpjs-kesehatan.go.id/bpjs/pages/detail/2014/20

Bureaucratic paperwork is always a hassle, but some processes in Indonesia are getting better.