As part of the economic policy package, Indonesia’s Minister of Finance issued a new regulation1 providing a temporary cash flow relief and to maintain liquidity of certain taxpayers for the sake of stability of the macro economy, encouraging economic growth, improving the competitive advantage of the domestic industries, and creating employment. Taxpayers qualifying for this tax relief are corporations in the following industries:
Ready-to-wear clothes industry
Children’s toys industry
A recommendation from the respective Minister is needed to apply for the relief. Taxpayers seeking to obtain the relief must first submit an application to the Head of the Tax Office where they are registered.
The relief is in the form of: (i) reduction of monthly estimated tax payments for the tax period of September 2013 until December 2013 based on a reduction of the actual August estimated tax payment by the maximum percentage limit noted below, and/or (ii) postponement of the payment of the annual corporate income tax for Fiscal Year 2013. The maximum limits for reduction of the estimated monthly tax installment are set as follows:
25% of the installment of the tax period August 2013 for eligible taxpayers which are not export-oriented; or
50% of the installment of the tax period August 2013 for eligible taxpayers which are export-oriented.
The maximum postponement of payment for the annual corporate income tax is three months from the prescribed deadline based on the taxpayer’s book year-end. The Director General of Tax (DGT) will waive any late payment penalty resulting from the postponement of tax payments. This regulation entered into force on 27 August 2013.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.