The government extended the deadline for the utilization of tax incentives for industries affected by Corona Virus Disease 2019 (Covid-19) until December 2020 tax period from the previous one which was only valid until September 2020 tax period. This is stated in Minister of Finance Regulation (PMK) number 86 / PMK.03 / 2020 which replaces the previous regulation, PMK number 44 / PMK.03 / 2020.
As known, previously the government had issued a number of tax relaxation such as, Income Tax Article (ITA) 21 borne by the government (DTP), 30% reduction of ITA 25 installment, exemption of ITA 22 on Import, acceleration of Value Added Tax (VAT) refunds and final income tax borne by the government for taxpayers with gross income below IDR 4.8 billion per year or Micro, Small and Medium Enterprises (MSME).
This expansion of incentives is carried out because the role of the incentives provided is no longer merely to mitigate the impact of the pandemic on a number of economic activities. Moreover, the expansion of relaxation was carried out as part of the National Economic Recovery (PEN) program.
In addition to extending the time limit for using incentives, in the latest regulation the government also increased the number of business sectors receiving various facilities. This is the second time the government has extended these tax facilities, after the first extension was made by issuing PMK number 44 / PMK.03 / 2020 replacing PMK number 23 / PMK.03 / 2020.
Incentive of ITA 21 Borne by The Government
Recipients of ITA 21 borne by the government incentive are employees who work in companies engaged in one of 1,082 Business Classifications (KLU), companies that obtain Import Facility of for Export Purpose (KITE) and companies in Bonded Zone. Formerly this facility was only valid for 1,062 KLU.
The income of employee whose income tax is borne by the Government is limited to a value of no more than IDR 200 million per year. With this extension and expansion, the coverage of the number of employees entitled to the facility will be greater with a longer period of time.
With this facility, employees are entitled to get their full income without tax deduction until December 2020. Furthermore, the company as the employer is required to submit monthly reports on the realization of ITA 21 borne by the government.
Exemption Facility of ITA 22 on Import
Taxpayers who are engaged in one of 721 specific industrial fields, at the beneficiary companies of KITE facility, and in bonded zone companies get exemption from ITA 22 on import. Previously, this facility was only given to 431 specific industrial fields and KITE companies.
For the use of this facility, taxpayers must submit reports every month, from the previous ones per three months.
Incentive of 30% Reduction of ITA 25 Installment
The recipient of this incentive was expanded to 1,013 certain industries, KITE companies, and companies in bonded zones. Previously, the facility could only be used by corporate taxpayers operating in one of 846 specific industrial fields, KITE companies, and companies in Bonded Zone.
Ease of Acceleration of VAT Refunds
Taxpayers originating from 716 specific industrial fields, companies receiving KITE facilities and companies in the bonded zone have the right to apply for an acceleration of VAT restitution up to a maximum of IDR 5 billion.
In addition, the company can also apply for an acceleration of VAT restitution even though it does not perform certain activities such as the export of taxable goods or services, submission to the VAT collector, or the non-VAT submission.
The following is a comparison of the number of business sectors receiving incentives from various regulations issued by the government:
|Incentives||PMK 23 Year 2020||PMK 44 Year 2020||PMK 86 Year 2020|
|ITA 21 Borne by the Government||440 KLU||1.062 KLU||1.089 KLU|
|ITA 22 on Import||102 KLU||431 KLU||721 KLU|
|ITA 25||102 KLU||846 KLU||1.013 KLU|
|VAT Restitution||102 KLU||431 KLU||716 KLU|
|MSME Final Income Tax||-||MSME Taxpayers||MSME Taxpayers|
The government hopes that the people will take advantage of this facility, so that the Indonesian economy can recover quickly, because it has been under pressure in recent months. This provision will take effect on the date when this regulation was enacted, that is on 16 July, 2020.
To obtain the above fiscal incentives, taxpayers must apply online by first logging in via website pajak.go.id. After entering the system, click on the "Layanan (Service)" feature and select "Info KSWP". Next, taxpayers will be directed to the "Profil Pemenuhan Kewajiban Saya (My Obligation Compliance Profile)" feature, before then given the choice of tax facilities to be utilized.