The Realization of Restitution Is Still High, Is the Economy Recovering?

Monday, 06 December 2021

The Realization of Restitution Is Still High, Is the Economy Recovering?
Ilustrasi: Realisasi restitusi pajak pada Oktober 2021 naik

JAKARTA. The government recorded that the realization of restitution, or refunds for overpaid taxes until the end of October 2021, rose 13.29% from last year or year on year (yoy) to IDR 176.21 trillion.

This growth rate increased from the realization of restitution in September which recorded an increase of 12.27% yoy to IDR 160.75 trillion. In addition, the value of the restitution is also equivalent to 18.47% of total tax revenue until the end of October 2021, which is IDR 953.62 trillion.

Citing, the high trend of increasing tax returns shows that the company's cash flow is still experiencing problems, so they apply for restitution to the Directorate General of Taxes (DGT).

Triggered by The Incentives

This is because the amount of restitution paid to taxpayers is dominated by accelerated Value Added Tax (VAT) refunds, which are facilities for corporations experiencing liquidity problems during the Covid-19 pandemic.

The realization of VAT refunds was accelerated until the end of October, experiencing the highest growth, at 32.48% yoy to IDR 51.74 trillion.

Meanwhile, normal restitution only grew 3.29% yoy to IDR 95.38 trillion and restitution due to legal action grew 20.53% to IDR 29.08 trillion.


This condition is actually contradictory to the government's claim that the economy is starting to recover.

The government argued that the recovery occurred because tax revenue data up to the end of October 2021 grew by 15.32% yoy, one of which was driven by domestic VAT revenues which rose 13.3% yoy to IDR 236.7 trillion.

Meanwhile, regarding the high level of tax refunds, the DGT admits that the amount of the tax overpayment may not reflect the actual condition of the company.

This is because most of the tax dispute cases occur because of disputes over the value of restitution submitted by the company. In fact, restitution is also often used as a modus operandi by companies in committing tax crimes.


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