Tax Incentives For Entrepreneurs Reach IDR 56 Trillion In 2020

Illustration. (Photo: By courtesy)

JAKARTA - The government, through the Ministry of Finance, said that tax incentives targeting the business sector throughout 2020 are worth not less than IDR 56 trillion.

Deputy Minister of Finance Suahasil Nazara said the figure was state tax expenditure collected from various kinds of relaxation, such as Article 21 Income Tax, Article 22 Import Income Tax, and Article 25 Income Tax.

"The incentive is part of state expenditure with a value of around IDR 56 trillion", he said in a webinar, Monday, March 22.

Suahasil added, tax relaxation is intended so that the business community has a better ability to survive in running a business during the current pandemic. Therefore, reducing tax collection and even eliminating certain taxes is considered to be able to improve the financial performance and capabilities of business actors.

Furthermore, he also explained that taxes have an important role in supporting the activities of the state through the State Revenue and Expenditure Budget (APBN). According to him, the APBN is also one of the instruments that can be optimized to deal with the impact of a pandemic.

"Taxes are not only a form of state revenue, but also support for business actors through relaxation provided by the government", he said.

As previously reported, the Directorate General of Taxes (DJP) of the Ministry of Finance reported that the realization of tax revenue in the first two months of 2021 was IDR 144.93 trillion.

This booklet is lower than February 2020 which was recorded at IDR 153.57 trillion. A decrease of 5.62 percent is allegedly due to conditions before the pandemic at the beginning of last year.

Meanwhile, the performance of Value Added Tax (PPN) and Sales Tax on Luxury Goods (PPnBM) grew by 3.46 percent on an annual basis or year-on-year compared to the February 2020 period.

It is recorded that PPN and PPnBM revenues up to the end of last month reached IDR 58.12 trillion, or an increase from the same period in the previous year which amounted to IDR 56.18 trillion.