Testing How Exactly The Government Takes Steps To Cut Corporate Pph Rates In Response To The Pandemic

Illustration of MSMEs in Tanah Abang (Angga Nugraha / VOI)

JAKARTA - The COVID-19 pandemic that has spread throughout the world, including Indonesia, is causing pressure on the global and national economy. Both the supply and demand sides took a hit at once. The mobility of people and goods that is the lifeblood of the economy stops.

However, at a time like this, the Indonesian government was faced with a dilemma. Facing the plague, you need funds. But collecting taxes is not wise. Finally, the pandemic economy is then an option.

Executive Director of the Center for Indonesia Taxation Analysis (CITA) Yustinus Prastowo said, learning from a bad start at the beginning, the government was catching up by launching various policy packages. The goal is to keep the wheels of the domestic economy running.

Yustinus said that the tax that had been so often feared had become a savior. Incentive after incentive is disbursed. Start with PMK No. 23/2020, the government provides incentives for PPh Article 21 to be borne by the government for the manufacturing sector, exemption of PPh Article 22 on imports of raw materials for the manufacturing sector, reduction of Article 25 PPh, and acceleration of VAT refunds.

Not only limited to the manufacturing sector, the coverage of sectors that receive these incentives will also be expanded in line with the widespread impact of COVID-19 in Indonesia. The climax, said Yustinus, was the issuance of Perppu No. 1/2020.

In terms of taxation, in addition to relaxing tax administration and planning to impose taxes on trade via an electronic system, the government has also lowered the corporate income tax rate. The amount, from 25 percent to 22 percent this year, then to 20 percent starting next year.

Right?

Yustinus assessed that the government's policy of providing tax concessions, in particular the reduction of the Corporate Income Tax rate, in the economic stimulus package amid the outbreak of COVID-19, was right.

"In my opinion, the government is already on the right policy tracks. It remains only to expand the coverage, acceleration and implementation to be guarded," he said, through a written statement received by VOI, in Jakarta, Saturday, April 11.

According to Yustinus, with this policy, business actors should be grateful. Because, the discourse that is planned through the new omnibus law will take effect in 2021 has been accelerated. The initial motive as a sweetener for investment has changed to become a company breath in the midst of the COVID-19 storm.

The leeway, he continued, was acceptable to most corporate taxpayers apart from the SME category and those who are subject to final tax will enjoy it. Not only that, the consequence of decreasing tax rates is that the installments of Income Tax Article 25 of 2020 have been reduced, at least since April 2020. So, this year, taxpayers can enjoy cash leeway.

However, said Yustinus, the reduction in tax rates cannot stand alone, but must be followed by other policy changes that are conducive to business continuity. Therefore, the government issued Presidential Decree No. 54/2020, which among other things regulates the adjustment of tax targets, reallocation, and shifting of APBN spending to make it more effective and on target in overcoming the impact of COVID-19.

The adjustment of tax targets, said Yustinus, is intended to moderate the tax burden and relax tax collection, in addition to calculating financing needs.

"Paying attention to incentives at a critical time like this requires a careful eye. Instead of hastily saying this is not right or too siding with certain business groups, it would be more noble if this good policy is supported and encouraged so that its implementation is consistent," he said.

When the COVID-19 pandemic conditions where the number of positive patients continues to increase, and the enactment of large-scale social restrictions (PSBB) in Jakarta and other areas will follow, it is understandable that the public hopes that there will be a follow-up incentive package, which is being formulated.

Facing this extraordinary situation, he said, requires an extraordinary perspective and strategy as well. On the government side, it is imperative if this very difficult situation requires accuracy. The rupiah for the rupiah that is collected must be properly maintained in order to finance the various needs that come repeatedly.

"We are indeed being tested, of course tested to be promoted. If other countries have recently lowered their tax rates, it is quite certain that this is not an act of recklessness. Thailand and Vietnam have set a tariff of 20 percent, India has reduced the tariff from 30 percent to 25 percent, and Malaysia also adjusted the tariff to 24 percent. In fact, in 2018 the United States cut tariffs from 35 percent to 21 percent, "he said.

On the other hand, Yustinus said, when this condition is not true, UKM players are left behind. The tax burden on SMEs is still very open to relaxation, even though the current rate is quite low, namely 0.5 percent. However, the most important rescue scheme for SMEs today is helping with financing.

"Either through relaxation in the form of postponement of installment payments or injections of working capital. This is what the government is working on very seriously," he said.

Yustinus assessed that all government policies were discussed in a measured and responsible manner with criteria and conditions. Not to obstruct but to ensure that there is no moral hazard and illegal hitchhiking.

"Steve A. Bank's words are completely correct. If the 20th century taxes are a sword, then this century taxes are a shield. It is a fortress for the continuity of life, even to our children and grandchildren. We are racing a marathon and just arrived at one of the stops. Maintain stamina and be patient, "he said.