Page 3 - Newsletter (New Tax Facilities on Goods and Services Required to Address COVID-19 and Revision on State Budget)

DDTC Newsletter Vol.03 | No.08 I April 2020 Page 3 of 9

New Tax Facilities on Goods and Services Required to Address
COVID-19 and Revision on State Budget

Mutasi Barang Kena Cukai/CK-5) documents to no later include all indicators in the state budget, ranging from
than 1 August 2020. These documents are used to re- revenues, expenditure, surplus/deficit to financing.
import goods subject to excise that have been affixed
The revised state budget posture is outlined in
with the 2019 excise stamps from circulation to be
Presidential Regulation No. 54 of 2020 concerning
reprocessed or destroyed.
Changes in Posture and Details of the State Budget for the
Second, re-importing goods subject to excise into 2020 Budget of (Presidential Reg. No. 54/2020).
factories to be reprocessed/destroyed or to other places
The regulation was released as a follow up to the
outside the factory within a period of 30 days from the
Government Regulation in Lieu of Law No. 1 of 2020
notification of the CK-5 date.
concerning State Financial Policy and Financial
Third, the excise stamp affixing of brands owned by the System Stability to Address Corona Virus Disease 2019
same manufacturer under the supervision of a different (COVID-19) Pandemic and/or to Counter the Threats that
Customs and Excise office is allowed insofar as there Hinder the National Economy and/or Financial System
is an approval letter. This approval document itself is Stability (PERPU No. 1/2020).
issued by the Customs and Excise Office. This activity is,
In further detail, under the Presidential Regulation, the
however, only permitted if the DGCE issues CK-1/CK-1A
government has revised the state revenue target formerly
documents before 30 June 2020.
set at Rp2,233 trillion to Rp1,761 trillion. Furthermore,
Fourth, to the most possible extent, CK-5 document the state expenditure target formerly set at Rp2,540
services should apply the independent CK-5 mechanism. trillion has been revised to Rp2,614 trillion.
In the event that sealing is required, the sealing process
In contrast, there has been a rise in the primary balance
at the place of origin and the opening of the seal at the from approximately minus IDR 12 trillion to minus IDR
destination shall be conducted electronically (video
517.8 trillion. Further, the budget financing formerly set
call) under the Head of Customs and Excise Office’s at Rp307.2 trillion has been revised to Rp852.9 trillion.
considerations.
On the other hand, the deficit level previously set at
Rp307.2 trillion has now reached Rp852.9 trillion. In
Fifth, the monitoring of the market price of tobacco
products for the March 2020 period is deferred and other words, the deficit limit has also expanded by more
than 3% of the Gross Domestic Product (GDP).
carried out in conjunction with the monitoring of the
market price of tobacco products for the June 2020 The state budget of Rp. 2,614 trillion is subsequently
period. allocated in two main state expenditure items. First, the
central government expenditure budget of approximately
Sixth, the enumeration of goods subject to excise in the
Rp1,851 trillion, which includes additional expenditure
form of ethyl alcohol and beverages containing ethyl
to address COVID-19 pandemic of Rp255.1 billion.
alcohol in factories and/or storage facilities for the
Second, the transfer budget to regions and village funds
period of April and May 2020 shall not be carried out.
of Rp762.7 trillion.
The enumeration will be conducted simultaneously in
June 2020. This regulation, however, emphasizes that the central
government budget must be prioritized for addressing
Additionally, under this regulation, the Director General
COVID-19 pandemic and/or countering threats that
of Customs and Excise also entitles the DGCE officials to
endanger the national economy and/or financial system
carry out official duties, generate output, coordination,
stability. The central government spending, therefore,
meetings, and other tasks from the officials/employees’
should be focused on health spending, social safety nets,
residences through the WFH mechanism.
and efforts to recover the economy.
Under this regulation, the WFH mechanism is subject to
The revisions to the central government budget have
further coordination by the heads of work units through
resulted in several changes to the 2020 State Budget
certain agreements regulated as a whole or in turns. The
components. Broadly speaking, the revised components
implementation of WFH takes into account the workload
include changes in the internal budget ceiling within
of services and supervision as well as the potential risk of
government entities, changes in budget from various
COVID-19 spread within the DGCE environment.
sources to address natural disasters and pandemics, debt
interest reallocation, changes in exchange rates, changes
Revision of Tax Revenues in the 2020 in macroeconomic assumptions, and so forth.
State Budget Posture Meanwhile, for village funds budget, the additional
budget may also be used, among others, for the social
safety net in villages in the form of direct cash transfers
The government has revised the posture and details
of the 2020 State Budget (Anggaran Pendapatan dan for the poor villagers and COVID-19 outbreak handling
activities. However, changes in the components of the
Belanja Negara/APBN). The changes in the posture