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Indonesia Will Suspend the Collection of Income Tax Article 21

Thursday, 05 March 2020

Indonesia Will Suspend the Collection of Income Tax Article 21

JAKARTA. The government will suspend the collection of Income Tax Article (ITA) 21 as an anticipatory measure for the impact of the transmission of the corona virus or COVID-19 to economic activities. 

The delay is one of the incentives given by the government to stimulate economic activities. Previously, the government had also issued another stimulus package, with a value of IDR10.3 trillion. 

As quoted from cnnindonesia.com, the suspension of ITA 21 is expected to support the industry. However, the implementation is still waiting for the results of government studies involving various parties. 

Borne by The Government 

Quoting kontan.co.id, a similar policy was carried out by the government in 2008-2009. The policy was carried out to anticipate the effects of the global financial crisis occurred at that time. 

At that moment, the postponement of ITA 21 was carried out on labor-intensive industries, with a maximum income limit of IDR5 million per employee or labor. As it is not collected, the ITA 21 will be borne by the government. 

Other Options 

Delaying ITA 21 is not the only option the government will take to ward off the effects of the corona virus. The government is currently inventorying various steps that can be taken. 

Some options that are being studied include the reduction of ITA rates for individuals and corporates, the limit increase of non-taxable income (penghasilan tidak kena pajak/PTKP), the layer simplification of corporate tax rates from a maximum of 30% to 28%, as well as the provision of subsidies on oil and gas ITA, cooking oil VAT, biofuel VAT, oil and gas exploration VAT, and various import duties. 



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