Tax Incentives for Businesses Affected by Covid-19 are Extended, Coverage Expands.

JAKARTA. The incentives for taxpayers affected by the Corona Virus Disease 2019 (Covid-19) pandemic are extended for six months, until the end of June 2021. In addition to the extension, the government is also expanding the scope of incentive recipients.

Previously, the facilities consisting of Income Tax Article (ITA) 21 borne by the government, government-borne final income tax and final income tax on construction services,  exemption of ITA 22 on imports, and ease of accelerated Value Added Tax (VAT) restitution were valid until 31 December 2020.

Based on the written statement delivered by the Directorate General of Taxes (DGT), the extension and expansion of the facilities are contained in the Minister of Finance Regulation (PMK) Number 9 / PMK.03 / 2020 replacing PMK Number 86 / PMK.03 / 2020.

Read: Covid-19 Spreading Escalates, the Recipient of Tax Incentive Widened to MSMEs

The incentives are given in the context of mitigating the impact of the Covid-19 pandemic that stifled taxpayers' economic activities.

First, ITA 21 incentives are provided to taxpayers of company employees who are included in 1,189 specific business areas of facility recipients.

Another criterion that becomes a requirement is that the facility may only be used by employees with a maximum annual income of IDR 200 million and have a Taxpayer Identification Number (NPWP).

The facility can already be used for the fiscal period of January 2021, with the realization report available no later than 28 February 2021.

Second, the final income tax incentive of 0.5% for taxpayers of Micro, Small and Medium Enterprises (MSMEs) as stipulated in Government Regulation (PP) Number 23 of 2018.

Third, the final income tax incentive for construction services is given to income recipients from the construction service business on the Acceleration Program for Irrigation Water Use Improvement (P3-TGAI).

Fourth, the exemption of ITA 22 on imports is given to taxpayers from one of the designated business fields.
Formerly, the number of businesses receiving facilities was only 721 and now it has increased to 730 business fields.

Fifth, the reduction of ITA A25 installments is provided to taxpayers who are included in the 1,018 business fields that receive facilities. The number of the designated business fields is higher in number than before, which was determined to the only amount to 1,013 business fields.

The facility may already be used for the tax period of January 2021, and the realization report can be done not more than 28 February 2021.

Sixth, the incentive for accelerated VAT restitution to IDR 5 billion is given to companies that are among the 725 recipient business fields. The number of recipient businesses is more than the previous number of 716.

Reapplying

For the use of these facilities, taxpayers are required to make a realization report which is submitted no later than the 20th of the following month.

To get the facility, taxpayers still have to apply for a Tax Exemption Letter (SKB) again.