Boosting The Tourism Sector, Wishnutama Rayu Sri Mulyani Exempted Business Taxes

JAKARTA - The COVID-19 pandemic has a broad and deep impact on the tourism industry around the world, including Indonesia. Due to this condition, Minister of Tourism and Creative Economy Wishnutama asked the government to completely exempt income tax (PPh) 25 for tourism and creative economy actors (parekraf).

Wishnutama said that discussing PPh 25 fully or 100 percent could ease the burden on actors in the parekraf sector. This proposal was submitted to the Minister of Finance Sri Mulyani.

As is known, the government through the Ministry of Finance has provided a tax discount of 30 percent PPh for individuals (OP) and entities, to 18 tourism sectors. This discount is valid for six months.

"We are proposing PPh 25 to return to the Minister of Finance (Sri Mulyani) so that it is not only 30 percent, 100 percent if possible. But this is still in process," he said, in Jakarta, Wednesday, July 22.

Unfortunately, Wishnutama did not explain in detail what was meant by the abolition of PPh 25, whether the government did not collect taxes or just postponed it. This is because the government is currently providing a discount of 30 percent in the form of a six month delay for taxpayers.

For example, a taxpayer should pay IDR 50 million in installments of Income Tax Article 25. Because the taxpayer gets an incentive to reduce the PPh Article 25 installment, the taxpayer only pays IDR 35 million for the tax period.

Even though there are 30 percent installments of Income Tax Article 25 that are not paid during the April to September tax period due to the deduction facility, taxpayers are still required to calculate their actual income and income tax payable.

The reduction scheme or what is often called the Article 25 PPh installment discount is different from the reduction in the corporate income tax rate to 22 percent. The reduction, which was originally to be implemented in 2021, was accelerated to 2020 in accordance with Law (UU) No. 2 of 2020.

The provision of this article 25 PPh installment reduction facility is actually to make it easier for DGT and taxpayers. Deduction of Article 25 Income Tax installments, DGT already has provisions in the Decree of the Director General of Taxes No. KEP-537 / PJ / 2000.