- The government has decided to re-extend the period for the granting of tax incentives to taxpayers affected by the Corona Virus Disease 2019 ("COVID-19") through the issuance of Regulation of the Minister of Finance No. 3/PMK.03/2022 on Tax Incentives for Taxpayers Affected by the COVID-19 Pandemic ("Regulation 3/2022").
- The various tax incentives that will now be extended under Regulation 3/2022 break down as follows: 1) Article-22 import income tax (pajak penghasilan – "PPh") incentives for 72 business classification codes (klasifikasi lapangan usaha – "KLU"), which will be applicable in relation to certificates of exemption that are issued until 30 June 2022; 2) Reduction in Article-25 PPh installments for 156 KLU until the June 2022 tax period; 3) Final PPh for construction services which is borne by the government for income that is received or earned by taxpayers who are recipients of the Program for the Accelerated Improvement of Irrigation Water Use (Program Percepatan Peningkatan Tata Guna Air Irigasi/P3-TGAI) until the June 2022 tax period.
- Any employers, taxpayers and tax withholding agents who have not submitted any reports on the realization of the following incentives: 1) Article-21 PPh borne by the government; 2) Final PPh for taxpayers with certain gross turnovers borne by the government; or 3) Final PPh for construction services borne by the government, based on Regulation of the Minister of Finance No. 9/PMK.03/2021 on Tax Incentives for Taxpayers Affected by the Corona Virus Disease 2019 Pandemic ("Regulation 9/2021"), as amended several times, most recently through the issuance of Regulation of the Minister of Finance No. 149/PMK.03/2021 on the Second Amendment to Regulation 9/2021 ("Regulation 149/2021"), should submit realization reports by no later than 31 March 2022 in order to take advantage of PPh incentives for the 2021 tax year.
- Meanwhile, any employers, taxpayers and tax withholding agents who have submitted realization reports and/or reports on the realization of the corrected use of the abovementioned incentives based on Regulation 9/2021 and Regulation 149/2021 may submit reports on the realization of corrections for the January 2021 tax period up until the December 2021 tax period by no later than 31 March 2022.
- Furthermore, according to the Director of Outreach, Service and Public Relations at the Directorate-General of Tax at the Ministry of Finance, Neilmaldrin Noor, the government, through Regulation 3/2022, has now adjusted the recipients of government incentives in order to improve the targeting of said incentives in comparison with the previous frameworks of Regulation 9/2021 and Regulation 149/2021. Ultimately, by taking Indonesia’s fiscal capacity into account, the government has now adjusted the types and criteria that apply in relation to the receiving of tax incentives. Said incentives will thus be better targeted, more measurable and granted on a more selective basis to priority sectors that require government support. (ANT)
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