Regulating Tax Amnesty Volume II Up to VAT Rates, Jokowi Proposes Revision of KUP Law

JAKARTA. President Joko Widodo (Jokowi) reported having delivered a letter to the House of Representatives (DPR), to immediately discuss the revision of the Law on Taxation General Provisions and Procedures (KUP).

Quoting Bisnis.com, the substance of the amendment to the KUP Law covers several things.  First, regarding changes to the Value Added Tax (VAT) and Sales Tax on Luxury Goods (STLG) tariff schemes.

Second, it is related to the reduction of corporate Income Tax (PPh). Then, regarding the carbon tax and the plan to implement the tax amnesty volume II. Previously, the House of Representatives has established the KUP Bill as one of the national legislation programs in 2021.

Changes to the VAT Scheme

In addition to revising the KUP Law, the government also plans to overhaul the existing regulations in the VAT Law. However, changes to the collection scheme and the amount of VAT rates will also be regulated in the revision of the KUP Law.

Some of the provisions that will be changed include, the amount of VAT rate will use a multi-tariff scheme. Thus, the VAT rate collected on each goods and services will not be the same. 

Read: Raising VAT Rate Solves Problems (Not) Without Problems

The determination of tariff amount for each goods and services will depend on the type of goods and services and the type of industry, whether included in the manufacturing or trade industries.

Tax Amnesty Vol II

Meanwhile, citing kontan.co.id, the plan to implement the tax amnesty volume II is no longer a discourse but has become a government plan as outlined in the material for the amendment to the KUP Law.

The government hopes that the plan will soon be discussed and approved by the DPR. The purpose of this tax amnesty program is to cover the deficit in the State  Budget (APBN) and the shortfall of tax revenues.