The government provides relaxation to cigarette manufacturers in the form of a delay in the repayment period for excise tape orders of up to 90 days.
If previously, the 90-day repayment delay was only given to cigarette manufacturers with higher export volumes than products sold domestically, now all companies can enjoy this relaxation.
Provided that it meets the two conditions set. First, the company has deferred the payment due on 12 July 2021 or later. Second, the company submitted a payment deferral from 12 July 2021 to 31 October 2021.
The relaxation is stipulated in Regulation of the Minister of Finance (PMK) Number 94/PMK.04/2021 which is effective from 12 July 2021. This regulation is an amendment to PMK Number 30/PMK.04/2020 which is also an amendment to PMK Number 57/PMK.04/2017.
For information, under the current provisions, companies may request a delay in paying off excise tape with varying periods of time.
- A two-month delay from the date of ordering the excise tape is given to the manufacturer
- A one-month delay from order date for importers
- A 90-day delay for manufacturers with export volumes higher than domestic sales volumes
In addition to the varying time periods, the value of excise that can be deferred in payment also varies, depending on the type of business.
For manufacturers, the deferred excise value is up to twice the average value of excise tax per month based on the value of the ordering of the excise tape within the last six months or the last three months, depending on which average value is higher.
Meanwhile, for importers, the excise value that can be deferred is a maximum of one time of the average value of excise duty per month based on the order value of excise tape within the last six months or the last three months, depending on which average value is higher.
The postponement is granted based on the company's request followed up by the determination of the Head of the Customs and Excise Office or the Head of the Regional Office of Directorate General of Customs and Excise (DJBC). In addition, a delay can only be given if the manufacturer provides a guarantee.
This relaxation is provided as a form of government support for cigarette producers who are considered to be affected by the Corona Virus Disease 2019 (Covid-19) pandemic. So that the delay in repayment can strengthen the cash flow of companies that are included in the labor-intensive industry group.
However, this postponement will have a significant impact on the performance of state revenues. DJBC said the excise value affected by the delay reached IDR 71 trillion, which came from 120 tobacco products factories or 11 percent of the total number of cigarette factories.