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Jakarta Post

'File your tax returns': Tax office intensifies efforts to collect taxes as budget burdens multiply

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Wed, March 18, 2020   /   01:27 pm
'File your tax returns': Tax office intensifies efforts to collect taxes as budget burdens multiply A banner shows a message to "file your tax returns" attached to a footbridge in Bumi Serpong Damai, South Tangerang, Banten, on March 11, 2020. (JP/R Berto Wedhatama)

"FILE YOUR TAX RETURNS." As if once is not enough, this message is repeated three times in gigantic lettering on billboards across Indonesia. It projects the dire need for taxpayers to file their annual tax returns (SPT) so the government can secure the funds needed to stimulate the economy amid the COVID-19 pandemic.

Tax office spokesperson Hestu Yoga Saksama said the authority targeted for at least 80 percent of 19 million individual taxpayers to file their SPTs, adding that the tax office had several strategies in place to ensure taxpayers filed their SPTs.

“People need to file their tax returns to help the country amid the coronavirus outbreak that has had severe impacts, such as lowering oil prices and disrupting the manufacturing and tourism sectors,” Hestu told The Jakarta Post in a phone interview on Friday.

The tax office is encouraging individuals to file their SPTs online as it has suspended direct face-to-face services in compliance with the government's social distancing policy to help limit the spread of COVID-19.

The tax office has also taken to social media including YouTube to remind people to file their SPTs online.

President Joko “Jokowi” Widodo called on all citizens on Sunday to practice social distancing to help slow the spread of COVID-19 in the country, urging people to work, study and worship at home.

“We will go door-to-door if the taxpayers have yet to file their tax returns after the deadline,” he said, adding that the tax office would deploy officials and volunteers to visit non-compliant taxpayers.

The tax office has also extended the deadline to file tax returns from March 31 to April 30, “to make things easier and provide certainty for individual taxpayers”, it said in a statement on Sunday.

According to tax office data, 7.5 million taxpayers had filed their annual tax returns as of Monday, an increase from 6.9 million in the same period last year. A total of 306,464 taxpayers have filed their tax returns face-to-face this year, compared to last year's figure of 407,044.

A tax office official shows taxpayers how to file their annual tax returns at the Taxation Directorate General office in Sudirman, Jakarta, March 3, 2020.A tax office official shows taxpayers how to file their annual tax returns at the Taxation Directorate General office in Sudirman, Jakarta, March 3, 2020. (JP/Dhoni Setiawan)

Finance Minister Sri Mulyani Indrawati has also taken to social media to communicate the tax office's new policies. "We ask taxpayers to file their tax returns online or through the post office, and to avoid face-to-face interactions to minimize the potential for transmission.”

By Monday, the government had announced 117 confirmed cases, including five deaths from the pneumonia-like illness caused by the SARS-CoV-2 virus. Globally, the pneumonia-like illness has infected more than 182,000 people and taken at least 7,100 lives.

Yustinus Prastowo, the executive director of the Center of Indonesian Taxation Analysis (CITA), said the government could afford to widen its budget-deficit-to-GDP ratio to its self-imposed threshold of 3 percent to provide fiscal room to contain any potential shocks stemming from the COVID-19 pandemic.

“Right now, economic growth needs to be prioritized at the cost of tax revenue, but state budget credibility needs to continue to be maintained because it’s important,” Yustinus said, projecting that tax revenue would reach around 75 percent of the state budget target during the pandemic.

“The government should consider revising down the tax revenue target because the deficit could widen and thus make the state budget not credible,” said Yustinus, adding that the government should halt its long-term spending including on infrastructure projects to focus its attention on COVID-19 mitigation.

Read also: Indonesia can afford the coronavirus battle, but...

The government announced on Friday that it would allocate Rp 120 trillion (US$8.1 billion) from the state budget to stimulate the economy by providing tax incentives and subsidies for workers, businesses and families affected by the pandemic.

It has also announced a second stimulus package, worth Rp 22.9 trillion, which includes individual and corporate tax breaks, as well as a relaxation of loan disbursement and restructuring requirements.

The new measures add to the first Rp 10.3 trillion stimulus package announced on Feb. 25, which provided mortgage subsidies for low-income families and fiscal incentives for travel-related industries. The government will also speed up the disbursement of social spending in the first quarter and subsidies for the preemployment card program this month.

Read also: Indonesia’s 2019 budget deficit widens to 2.2 percent amid tax revenue short fall

The government collected Rp 103.7 trillion in state revenue in January, down 4.6 percent from the same month last year. Of the total, about Rp 84.7 trillion came from taxes, down 6 percent from the same period last year.

Meanwhile, government spending reached Rp 139.8 trillion, down 9.1 percent from the same period last year. This resulted in a budget deficit of Rp 36.1 trillion, 0.21 percent of GDP in January.