Extension of Five Tax Incentives Until the End of the Year – The government officially extended the tax incentive period until December 2020 from the previous one until September 2020 through the issuance of Minister of Finance Regulation (PMK) No.86/PMK.03/2020.
The regulation, enacted on July 16, 2020, mentions five types of tax incentives whose validity period is extended until the end of this year, including income tax (PPh) Article 21 Borne by the Government (DTP).
Then, the incentive for SMEs final PPh, exemption from import tax article 22, reduction of PPh article 25 installments by 30%, and accelerated value added tax (VAT) refunds. The regulation also revoked the previous PMK (PMK No. 44/2020).
“That Minister of Finance Regulation No. 44/ PMK.03/2020 concerning Tax Incentives for Taxpayers Affected by Pandemic Covid-19 is considered to be inappropriate, so it needs to be revoked, ” the regulation stated.
In addition to extending the validity period, the government also expands business sectors that are entitled to tax incentives. In PMK 86/2020, the coverage of Income Tax Article 21 DTP incentives from 1,062 business field classifications (KLU) was expanded to 1,189 KLU.
Then, the scope for importing Article 22 PPh exemption facilities from 431 KLU was expanded to 721 KLU. The coverage of the PPh installment discount Article 25 is expanded from 846 KLU to 1,013 KLU and VAT refunds are accelerated from 431 KLU to 716 KLU.
“To deal with the current impact of Covid-19, it is necessary to expand the sector which will be given tax incentives needed during the national economic recovery period,” Finance Minister Sri Mulyani Indrawati said in the regulation.
The issuance of this new regulation is also in line with the statement of the Minister of Finance which states Presidential Regulation No. 72/2020 has the opportunity to extend the validity of fiscal facilities until December 2020.
“President Decree (Perpres) 72/2020 accommodates new things, namely the expansion and extension of tax incentives for businesses, which in Perpres 54/2020 are given until September, we will be extended until December,” said the Minister at the end of June.
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