The government has relaxed the requirement for international tourists to claim a value added tax (VAT) refund for goods purchased in Indonesia, aiming at boosting tourism and encouraging small and medium enterprises to join the tax refund program.
A finance ministerial regulation issued on Aug. 23 allows tourists to request a VAT refund using multiple receipts of purchase with a minimum cumulative VAT amount of Rp 500,000 (US$35). Each of the receipts must state a VAT value of at least Rp 50,000 or Rp 500,000 in transaction value.
Previously, the receipts had to state a VAT value of at least Rp 500,000 to be eligible for the refund.
“With the implementation of this regulation, international tourists are able to collect their purchase receipts with a minimum value of Rp 500,000 each from several days and various shops, and after the transaction amount has reached Rp 5 million, they can ask for a VAT refund,” a press statement issued by the Taxation Directorate General on Thursday read.
In order to claim the VAT refund, the tourists have to present their passport, boarding pass and receipts issued by merchants participating in the scheme to the VAT refund points at five international airports in the country. The airports are Soekarno-Hatta International Airport in Cengkareng, Banten; Kualanamu International Airport in Medan, North Sumatra; Adisucipto International Airport in Yogyakarta; Juanda International Airport in Surabaya, East Java and Ngurah Rai International Airport in Kuta, Bali.
“There is not yet any plan to add more VAT refund services in other airports. We see that those five airports already have many direct international flights,” tax office spokesman Hestu Yoga Saksama told The Jakarta Post via text message on Thursday.
As of August, 55 corporate taxpayers (PKP), which own 501 retail stores, are participating in the refund scheme, tax office data revealed.
The influx of tourists visiting Indonesia has affected the amount of VAT refund. The tax office refunded Rp 11.2 billion in VAT to tourists last year, during which – according to Statistics Indonesia (BPS) data – Indonesia welcomed 15.8 million international tourists.
The figure was an increase from Rp 6.4 billion in VAT refunds recorded in 2017 when the country welcomed 14.03 million tourists.
As of July 2019, the amount of VAT refunds had reached Rp 6.2 billion.