Page 8 - Indonesia Taxation Quarterly Report (Q1-2020)

INDONESIA TAXATION QUARTERLY REPORT Q1-2020

Executive Summary

Survey of Recent nearly 40 trillion rupiah, followed by
Developments trading industry reach 35.3 trillion rupiah.

Based on the tax types, Corporate Income
The COVID-19 outbreak in the first Tax (CIT) was the largest contributor
quarter of 2020 has affected the overall to the total revenues of Article 25/29
Indonesia’s economy as it disrupts income tax in both January and February.
investors’ trust, the financial market, However, similar with most other taxes,
the tourism/travel sector and the it grew negatively by 19.6%. Meanwhile,
distribution chain. As it takes place Article 25/29 individual income tax and
almost all over the world, the IMF has domestic VAT saw solid yoy growth,
officially announced on 27 March 2020 above 10% during the first two months.
that the world is on the brink of a global
recession that jeopardizes economic Meanwhile, the customs and excise
activities in countries affected by the sector has shown far improved revenue
COVID-19. performance in terms of revenue
and growth. The customs and excise
revenues amounted to 25.04 trillion
In terms of revenue performance, rupiah or 11.22% of the 2020 state
by the end of February, taxation (tax budget target, higher than the average
plus customs and excise) revenue revenue realization of the last 5 years.
has reached Rp177.96 trillion. This One of the main contributors was the
attainment only amounted to 9.54% of large Tobacco Products Excise (Cukai
the 2020 state budget target, slightly Hasil Tembakau/CHT) revenue in
below the realization in the same month February, reaching Rp8.22 trillion and
last year of 9.92% from the 2019 state growing by 93.23% yoy.
budget. Meanwhile, the tax revenue
realization alone added up to Rp152.92 Despite the low revenue performance,
trillion or reached 9.31% of the target the government has provided ‘relaxation’
which was lower than last year's policies which includes specifically
performance of 10.20% of the State for the companies/industries affected
Budget target in the same period. by COVID-19. The tax policies and
extraordinary measures undertaken
Revenue contraction occurs on income by the government are outlined in
taxes – both in oil and gas and non-oil Government Regulation in Lieu of Law of
and gas sectors –, VAT and Sales Tax the Republic of Indonesia Number 1 of
on Luxury Goods (SLTGs). Income Taxes 2020 (Perppu No. 1/2020).
contributed 61% of the total revenue,
while VAT and SLTGs contributed by In further detail, four taxation policies
38%. Based on the income tax sector, are aimed at addressing the threat of
the non-oil and gas sector remained economic impacts of COVID-19. First,
the most significant sector, contributing the adjustments to CIT rates of resident
57.5%. Based on economic sectors, corporate taxpayers and permanent
the manufacturing industry remains establishments. Second, the tax
the largest industry (32.74% of total treatment for Trade Through Electronic
revenues) which in February received Systems (Perdagangan Melalui Sistem
Elektronik/PMSE).

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