Tax Incentives Related to Covid-19 Expanded, the Government Aims 18 Business Sectors

Friday, 24 April 2020

Tax Incentives Related to Covid-19 Expanded, the Government Aims 18 Business Sectors

JAKARTA. The government will add a list of industries receiving tax incentives related to the 2019 Corona Virus Disease (Covid-19) by revising the Minister of Finance Regulation (PMK) number 23 / PMK.03 / 2020 on Tax Incentives for Taxpayers Affected by the Corona Virus Outbreak.

In the regulation, the government only provides incentives for one sector, that is manufacturing. These incentives include Income Tax (ITA) 22 borne by the government (Ditanggung Pemetintah/DTP), exemption of ITA 22 on Import, reduction of ITA 25 by 30% for 6 months, and accelerated VAT refunds.

However, as quoted from, the government intends to expand it, so that the total recipient of incentives will eventually become 18 sectors with 749 Indonesian Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia/KBLI). This amount is more than the previous plan of additional sectors that has ever been delivered by the government, which is only 11 sectors.

Read: Responding Corona, Tax Stimulus Package is Officially Valid 

However, the government has not yet explained the 18 additional sectors in detail. Meanwhile, the government has indeed mentioned 11 additional sectors that will receive incentives, such as the food sector which includes livestock, fisheries, plantations, and agriculture.

Then, the free and retail trade sector, the electricity sector, the oil and gas sector, the mining sector, the forestry sector, the tourism sector, the telecommunications and entertainment services sector, the construction sector, the logistics sector, and the air transportation sector.

Rejecting Application 

Citing, to date, there are more than 20.018 applications of incentives received by the tax authorities, consisting of 10.062 applications for ITA 21 Borne by The Government facility, 3.557 exemption of ITA 22 on import facility, and 4.346 requests for ITA 25 reduction facility.

However, not all of the applications were approved, some were rejected because they did not meet the criteria as a company that could get incentives. Total rejected applications reached 4.634 applications, consisting of 2.452 requests for ITA 21 Borne by The Government facility, 652 requests for exemption of ITA 22 on import, and 1.530 applications for ITA 25 discount.(ASP/KEN)



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