DGT Improves Liberation Services On Goods And Services For Hankam Needs

JAKARTA - The government has issued a regulation regarding the exemption of value added tax (VAT) on imports for defense and security purposes (Hankam) which will take effect on January 1, 2024.

The regulation is contained in the Regulation of the Minister of Finance (PMK) Number 157 of 2023 concerning Procedures for Release from Imposition of Value Added Tax on Imports and/or Submission of Certain Taxable Goods that are Strategic and Submission within the Customs and/or Utilization Areas of Customs in Certain Taxable Services Customs Areas that are Strategic for the Needs of Defense and/or State Security.

As the implementing regulation of Government Regulation (PP) Number 49 of 2022, PMK-157/2023 provides legal certainty and improves the service of providing Value Added Tax exemption facilities (VAT) for taxable goods and taxable services that are strategic in nature for national defense and security purposes which will take effect from January 1, 2024.

Therefore, the issuance of PMK 157/2023 is to emphasize and detail the provisions regarding the exemption of VAT from the submission of BKP/JKP for Hankam's needs.

"With the issuance of this PMK, DGT seeks to eliminate disputes in the field related to the criteria for exemption of strategic taxable goods and services for defense and security purposes," said Director of Counseling, Services and Public Relations of the Directorate General of Taxes (DJP) Dwi Astuti in her official statement, Thursday 11 November.

For your information, PMK157/2023 stipulates certain strategic BKP and JKP criteria in the form of weapons, ammunition,zalized helmets and rocketed jackets/rompics, special land vehicles, and radars that are fully regulated in Attachment I as part of the PMK.

In addition, it also includes services in the context of providing boundary data, topographic results maps, hydrography results maps, and air photos of the territory of the Unitary State of the Republic of Indonesia for defense and security purposes.

VAT exemption facilities are provided with the Free Certificate (SKB) mechanism. Taxpayers can obtain SKB by fulfilling the requirements for compliance and completeness of documents and information.

In this PMK, it also regulates the DGT's authority to oversee the use of VAT exemption facilities, which in the previous provisions were not regulated, namely in the form of replacement procedures and cancellation of SKB and imposing sanctions.

Dwi conveyed that the service for providing PPN BKP and strategic JKP exemption facilities for national defense and security is also more accessible because they already use electronic channels.

"With the improvement of services from what was previously carried out manually, it is hoped that it can build VAT exemption governance in accordance with the principles of trust and verification," he explained.

For information, the issuance of PMK-157/2023 officially revokes the provisions of the Decree of the Minister of Finance (KMK) Number 370 of 2003 concerning the implementation of value added tax that is exempted on imports and/or the delivery of certain taxable goods and/or the delivery of certain taxable services that are exempt from the imposition of value added tax.

Even so, the SKB which has been issued based on KMK-370/KMK.03/2003 can still be valid until it is utilized.