Tax Stimulus to Prop Up Economy Amid Coronavirus Outbreak

Indonesia will grant a six-month tax break for employees, manufacturers, and importers, starting as soon as next month, as part of its second fiscal stimulus package to reduce the impact of the coronavirus (Covid-19) outbreak and to keep the real sector moving and maintain purchasing power in order to boost domestic economic performance.

The Coordinating Minister for Economic Affairs Airlangga Hartarto (11/3) said the fiscal stimulus to be provided, in the form of relaxation of income tax article 21 (PPh 21), import tax article 22 (PPh 22), income tax article 25 (PPh 25), and value added tax (PPN) restitution. Following are the details for fiscal stimulus.

Policy

Sector

Objective

Regulation

Relaxation of PPh 21 for workers.

 

Given for 6 months, starting from April to September 2020.

Manufacture (Processing Industry/ KLU Code C)

Provide additional income for workers in the manufacturing sector to maintain purchasing power.

 

The amount of value borne by the government is IDR 8.60 trillion.

Will Publish New Minister of Finance Regulation.

Relaxation of PPh 22 (Income Tax Article 22 Imports).

 

Given for 6 months, starting from April to September 2020.

 

-19 certain sectors*;

-KITE taxpayers;

-SME Export Oriented (KITE) taxpayers.

To provide cash flow space for the industry as compensation for switching costs (costs related to changes in the country of origin of imports).

 

The estimated total exemption was IDR 8.15 trillion.

PER 1 / PJ / 2011 concerning Procedures Submission of Application for Exemption from Cutters and / or Collections Income Tax by Other Parties.

Reduction of income tax article 25 (PPh 25) by 30%.

 

Given for 6 months, starting from April to September 2020.

-19 certain sectors*;

-KITE taxpayers;

-SME Export Oriented (KITE) taxpayers.

To maintained the stability of domestic economy and export can be expected increased.

 

The estimated total exemption was IDR 4.2 trillion.

Will Publish New Minister of Finance Regulation.

Relaxation of value added tax (VAT) refunds.

 

Relaxation is provided through accelerated VAT refunds (preliminary returns)

 

Given for 6 months, starting from April to September 2020.

-19 certain sectors*;

-KITE taxpayers;

-SME Export Oriented (KITE) taxpayers.

With the acceleration of restitution, taxpayers can be more optimal in maintaining liquidity.

 

The estimated total value of restitution is Rp1.97 trillion.

PMK No. 39 / PMK.03 / 2018 PMK stdd No. 117 / PMK.03 / 2019 concerning Governance How to Return Returns Overpayment of Taxes.

 

Minister of Industry Agus Gumiwang stated the 19 certain sectors included:

1.Chemical industry and chemical products

2.Other transportation equipment industry

3.Food industry

4.Basic metal industry

5.Paper industry and paper goods

6.Beverage Industry

7.Pharmaceutical industry, chemical drug products, and traditional medicine

8.Manufacture of motor vehicles, trails and semi-trailers

9.Rubber industry, rubber goods and plastics

10.Non-metal mining industry

11.Apparel industry

12.Electrical equipment industry

13.Textile industry

14.YDTL (not included in the others) machinery and equipment industry

15.Manufacture of metal goods and machinery and equipment

16.Printing and reproduction of the recording media industry

17.Leather industry and footwear

18.Furniture industry

19.Manufacture of computers, electronics and optical goods

For more information, see the website address below

https://www.kemenkeu.go.id/publikasi/berita/ini-paket-stimulus-fiskal-jilid-2-antisipasi-dampak-negatif-virus-corona-pada-ekonomi/