Page 5 - Newsletter (Reduction of Income Tax Rates for Publicly Listed Companies and Establishment of VAT Withholder Criteria for E-Commerce Businesses)

DDTC Newsletter Vol.04 | No.01 I July 2020 Page 5 of 13

Reduction of Income Tax Rates for Publicly Listed Companies and
Establishment of VAT Withholder Criteria for E-Commerce Businesses

convenient, inexpensive, technology and information- trillion has been revised to Rp1,039 trillion. The deficit
based implementation of tax rights and obligations by level formerly set at Rp307,2 trillion has now reached
revising the General Tax Provisions and Procedures Rp1,039 trillion. In other words, the deficit ceiling
Law. has also been expanded to 6,34% of Gross Domestic
Product (GDP) from previously below 3% of GDP.
Sixth, revising the Income Tax Law to expand the tax
base, improve tax compliance, and increase taxation of This regulation renders flexibility to the Minister of
cross-border transactions. Seventh, the establishment Finance. In this context, in the event of a a shift in the
of a Tax Draft Law on Goods and Services to establish details of budget financing and its use, the Minister
the level of VAT compliance in Indonesia and expand of Finance is authorized to stipulate its provisions. In
the tax base. Eighth, the revision of the Customs the event that several provisions under Pres. Reg. No.
Law to increase foreign exchange, protect Micro, 72/2020 as well as various implementing regulations
Small, and Medium Enterprises (MSMEs), establish of the Pres. Reg. No. 54/2020 are not revised, the
revitalization, simplification, modernize the export provisions remain valid insofar as they do not conflict
sector mechanisms, improve IT services and data with the provisions under the presidential regulation
exchange, and strengthen supervision. set on 24 June 2020.
Ninth, revising the Excise Law to emphasize the Next, in the appendix of Pres. Reg. No. 72/2020, the
paradigm of excise as an instrument to control government also details the changes in the tax revenue
consumption and assert that administrative sanctions target. The tax revenue target has been decreased from
take precedence over penal sanctions. In addition, Rp1,865 trillion to Rp1,404 trillion. Detailed changes
the government plans to change the concept of excise to the tax revenue target can be seen in Table 1.
earmarking, convert STLGs to excise, and adjust other
In addition to taxation revenues, the appendix
administrative materials.
contains Memorandum Items concerning the details
of the Government Borne Taxes (Pajak Ditanggung
Changes to the Posture and Details Pemerintah/DTP) amount. The amount of DTP Taxes
is a fiscal stimulus provided by the government to
of Revised State Budget for the 2020 address the Covid-19 pandemic. In further detail, the
Budget Year amount of DTP Tax can be seen in Table 2.

The government has again revised the posture
and details of the 2020 State Budget (Anggaran Expanded Scope of Services of Tax
Application Service Providers
Pendapatan dan Belanja Negara/APBN). The changes
in the posture include all indicators in the state budget,
ranging from revenues, expenditure, surplus/deficit to The Director General of Taxes has both amended the
financing. provisions on and expanded the scope of services
provided by taxation application service providers
The revised State Budget posture is outlined in
(penyedia jasa aplikasi perpajakan/PJAP). The
Presidential Regulation No. 72 of 2020 concerning
amendments and expansion of the scope of services
the Second Amendments to the Posture and Details of
are outlined in the Director General of Taxes Regulation
the State Budget for the 2020 Budget Year (Pres. Reg.
No. PER-10/PJ/2020 concerning the Amendments
No. 72/2020). Several budget posts in the 2020 APBN
to the Director General of Taxes Regulation No. PER-
were formerly amended to the 2020 Revised State
Budget (Anggaran Pendapatan dan Belanja Negara 11/PJ/2019 concerning Taxation Application Service
Providers (PER-10/2020).
Perubahan/APBNP) through Presidential Regulation
No. 54 of 2020 (Pres. Reg. No. 54/2020). Enacted and coming into force on 19 June 2020, this
regulation has been issued to harmonize the policies
In further detail, under Pres. Reg. No. 72/2020, the
on taxation service provision with government
government reduces the state revenue target formerly
regulations in lieu of laws relating to state financial
set at Rp2,233 trillion to Rp1,699 trillion. On the
policies to address the Covid-19.
contrary, the state expenditure target formerly set at
Rp2,540 trillion is raised to Rp2,739 trillion. PJAP or application service providers (ASP) is a party
appointed by the Director General of Taxes to provide
Further, the primary balance formerly set at around
tax application services for taxpayers. Formerly, PJAP
Rp12 trillion plunges to minus Rp700 trillion.
was only required to provide five services. These
Likewise, the budget financing formerly set at Rp307
services include: