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Tax cuts extended to year-end
The Finance Ministry has extended at least six tax incentives but has shrunk their scope to relieve fiscal pressure.
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Taxpayers report their tax returns at the Directorate General of Taxes in the Sudirman Building in Jakarta on March 11, 2020. (JP/Dhoni Setiawan)
T
he government has extended at least six tax incentives until December to support businesses and workers amid the tightening of mobility restrictions but has shrunk their scope to relieve fiscal pressure.
The Finance Ministry recently issued regulation No. 82/2021, which extends incentives related to personal income tax, corporate income tax, income tax for small businesses, final income tax for construction services, import duties and value-added taxes.
The regulation came into force on July 1, replacing Finance Ministerial Regulation No. 9/2021, under which the incentives would have expired at the end of June.
“Giving tax incentives needs to be done selectively, prioritizing certain sectors that face hurdles and require support for their recovery, such as health care, education, transportation, construction and accommodation services,” Neilmaldrin Noor, the spokesperson for the tax office, was quoted in a press release as saying on Thursday.
Read also: Govt extends tax cuts to bolster recovery
The incentive for personal income tax, for example, applies to 1,189 industries, with an exception for businesses that have received import facilities in bonded zones.
Businesses and workers have been calling for extended tax incentives to survive an expected economic downturn from the enactment of emergency public activity restrictions (PPKM Darurat) from July 3 to 20. The curbs are meant to stem a rise in COVID-19 cases and deaths as healthcare facilities near full capacity.
