Govt Simplifies Tax Payment Mechanism for Small Industries

Fitri Novia Heriani, IGAP Trisnajaya

Kismantoro Petrus, Director of Counseling, Service, and Public Relations at the Directorate General of Tax (Directorate), Friday (1/2), stated that the Directorate plans to establish a simplified value added tax payment mechanism for small industries—which has income of up to IDR 4.8 billion per year—in order to improve their administration system.

Previously, value added tax for small businesses was calculated on the same basis as the large businesses. However, it is harder for small businesses to calculate their tax in that manner as they do not use advance accounting systems to record their expenses and income.

The new mechanism calculates value added tax for small businesses from their income record, which makes the tax calculation process easier.

The new mechanism will be established under the Minister of Finance Regulation on Tax of Small and Medium Enterprises.

“This new strategy is effective in helping small businesses to calculate their tax,” stated Kismantoro.

Soeprayitno, Chairman of Indonesian Business Association (Apindo), supported the new mechanism established by the Directorate.

Soeprayitno stated that by creating a simpler tax calculation mechanism, the Directorate will improve tax calculation practices within small industries.

In addition, Awan Nurmawan, Director of Taxation Regulation I at the Directorate, stated that the Directorate will also update the list of taxable enterprises, tax invoices, and tax reporting mechanism for the purpose of improving the administration process of tax payments.

Awan explained that in an attempt to update the list of taxable enterprises, the Directorate has found and removed four hundred thousand businesses with no clear business activities or definite owners from the list of taxable enterprises.

Moreover, the Directorate will improve tax invoices by adding a serial number to each invoice, which will make the invoices easier to record, control, and manage.

Additionally, taxable companies must update their data by submitting their address, email, list of names, and a signature of the person who is responsible for signing tax invoices, along with their legalized copy of identity card.

Finally, the Directorate will improve taxation reporting system by focusing on the development of electronic tax reports. Thus, the Directorate will keep information up to date online.

(jt)

Fitri Novia Heriani, IGAP Trisnajaya

Kismantoro Petrus, Director of Counseling, Service, and Public Relations at the Directorate General of Tax (Directorate), Friday (1/2), stated that the Directorate plans to establish a simplified value added tax payment mechanism for small industries—which has income of up to IDR 4.8 billion per year—in order to improve their administration system.

Previously, value added tax for small businesses was calculated on the same basis as the large businesses. However, it is harder for small businesses to calculate their tax in that manner as they do not use advance accounting systems to record their expenses and income.

The new mechanism calculates value added tax for small businesses from their income record, which makes the tax calculation process easier.

The new mechanism will be established under the Minister of Finance Regulation on Tax of Small and Medium Enterprises.

“This new strategy is effective in helping small businesses to calculate their tax,” stated Kismantoro.

Soeprayitno, Chairman of Indonesian Business Association (Apindo), supported the new mechanism established by the Directorate.

Soeprayitno stated that by creating a simpler tax calculation mechanism, the Directorate will improve tax calculation practices within small industries.

In addition, Awan Nurmawan, Director of Taxation Regulation I at the Directorate, stated that the Directorate will also update the list of taxable enterprises, tax invoices, and tax reporting mechanism for the purpose of improving the administration process of tax payments.

Awan explained that in an attempt to update the list of taxable enterprises, the Directorate has found and removed four hundred thousand businesses with no clear business activities or definite owners from the list of taxable enterprises.

Moreover, the Directorate will improve tax invoices by adding a serial number to each invoice, which will make the invoices easier to record, control, and manage.

Additionally, taxable companies must update their data by submitting their address, email, list of names, and a signature of the person who is responsible for signing tax invoices, along with their legalized copy of identity card.

Finally, the Directorate will improve taxation reporting system by focusing on the development of electronic tax reports. Thus, the Directorate will keep information up to date online.

(jt)

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