In addition to ITA 21, the government will also postpone collection of ITA 22 and 25

Wednesday, 11 March 2020

In addition to ITA 21, the government will also postpone collection of ITA 22 and 25

JAKARTA.  The government will expand the plan to provide tax relaxation, as a respond to the impact of the spread of the Corona virus or the so-called Covid-19 on the economy in a number of countries, including Indonesia.  Previously, the government would only delay the collection of individual income tax (Pajak Penghasilan/PPh) of individual employees, or Income Tax Article (ITA) 21. 

However, in the near future the delay in paying PPh will also be imposed not only to employees but also to individuals who earn free income, namely ITA 22, ITA 25 and import duties. This is done so that manufacturing industries that need to import capital goods, can immediately procure. 

Finance Minister Sri Mulyani Indrawati said that the draft regulation on delaying individual PPh payments or Article 21 PPh was almost complete. This includes discussions regarding the duration of the delay and which business sector will receive the facility. 

"For PPh 21, our discussion at the Ministry of Finance is quite detailed. This means that we have prepared a mechanism, counting if we give the number of months and the scope of what or what sectors are targeted.  From the technical discussion side at the Ministry of Finance, 95 percent has been completed, "explained Sri Mulyani in the Central Directorate General of Taxes Building (DGT) on Tuesday (10/3). 

Read: Tax Impacts on Investment

Sri Mulyani also explained that she would coordinate with Coordinating Minister for the Economy Airlangga Hartarto and bring the draft regulation to a cabinet meeting before President Jokowi. Then, it will be decided, when the rule 21 PPh postponement applies. "In ethical policy, we coordinate with the Coordinating Minister (Coordinating Minister for the Economy) and the cabinet.  The remaining 5 percent are timing decisions and must be presented first, "she continued. 

She explained, the mechanism for postponement of PPh 25 had also been prepared.  However, her party is still conducting further discussions related to how long the delay and what business sectors will get the incentive. 

"PPh 25 for corporations is also considered.The only problem is for how long and for any sector.  As in the United States (US), President Trump said there is a bold measure and his advisors are selective.  Also, in Canada, the prime minister said it was selective to protect the economy, but the specifics were still in the process, "she added. (Ken)


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