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Tax Flash MAR 2019

KIB TAX FLASH March 2019

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Tax Flash MAR 2019

  1. 1. TAX FLASH “Individual commitment to a group effort — that is what makes a team work, a company work, a society work, a gov- ernment work, and a civilization work.” -Vince Lombardi In This Issue • Dialogue on taxes— DGT & DGCE up- dates • Ministry of Finance: Economy Outlook & Achievements • “Industry 4.0” Ministry of Industry • The Cashless Jakar- ta, today. • Our Involvement Capture from “Dialog Ekonomi & Kebijakan Fiskal Bersama Menteri Keuangan” 19/02/19 DGT & DGCE in Synergy On Feb 19, 2019, the Directorate General of Taxation and The Directorate General of Custom & Excise announced their pledge of initiatives in re- sponse to the critical needs of both offices in data network integration. The Ministry of Finance is in full support to accommodate such a Synergy Program and has incorpo- rated it within the Ministry’s Economic Policy in 2019. While the initiatives kick-off is set in 2019, the program implementation is expected to run in the next 5 years time 2020—2025. This synergy program is expected to solve the overall business process issues within both offices, escalate work effectiveness and efficiency, and above all it is aimed to help improve their services to businesses, and tax payers. KIB E-newsletter March 2019
  2. 2. Directorate General of Taxation (DGT) Simplification on Tax Annual Return Submission PMK-09/PMK.03/2018 Key Points: 1.“Nil” Income Tax Annual Return (SPT PPh) article 25 is not obligated to submit report 2.“Nil” Periodical Income Tax Return (SPT Masa PPh) Article 21/26 is not obligated to submit report, except for December. Simplification on Tax Return Services PER-03/PJ/2019 1. Channel Extension: KP2KP (Kantor Pelayanan Penyuluhan, dan Konsultasi Perpajakan) and (Pojok Pajak) may receive all types of Tax Return (including overpaid and amendment) 2. Files attachment on e-filling is simplified: now, it can be submitted in more than one PDF files, (before it was limited to only one file) 3. SSP (Surat Setoran Pajak) is no longer required to be attached on all types of Tax Returns. (before it was applicable to 1770S Tax Return and SS with Nil or Underpaid status). Tax Re-form “The hardest thing to understand in the world is the income tax” -Albert Einstein
  3. 3. Directorate General of Taxation (DGT) Expediting Restitution Process PMK-39/PMK.03/2018 VAT Restitution Application— National Data There has been significant jump in number of expedited restitution applied , since the PMK came info effect on 12 April 2018. Tax Re-form “Nothing is impossible if we put our trust in God” -Bambang Suwarso TYPE OF TAX 2017 2018 ∆ ∆ % 2017 2018 ∆ Rp, ∆ % Tax Payer with certain criteria (Article 17C) 252 406 154 61% 3,595 4,943 1,348 37% Tax Payer meets certain require- ment (article 17D) 662 3897 3235 489% 66 993 927 1414% Low-risk PKP (article 9 (4c) UU PPN 585 1146 561 96% 7,082 14,529 7,447 105% 1499 5449 3950 264% 10,742 20,465 9,722 91% Overpaid SPT PPN submitted by Tax Payer (May—Dec) Number of SPT Nominal (billion Rp.)
  4. 4. Directorate General of Taxation (DGT) Core Tax System Reforming Core Tax Administration System Tax Re-form “For me, privacy and security are really important. We think about it in terms of both: You can’t have privacy without security.” - Larry Page Culture Business Process SDM Technology InformationData Organization Benefiting Tax Payer • Transforming DGT’s services through comprehensive (digital) Technology Information • Including business process, policy, regulation, culture and organization structure improvement.
  5. 5. “Liberty, when it begins to take root, is a plant of rapid growth." - George Washington
  6. 6. “Growth is never by a mere chance, it is the result of forces working together." - James Cash Penney
  7. 7. “The line between disorder and order lies in logistics." - Sun Tzu
  8. 8. “Voters want conflicting things. They want a lot of government spending, but they don’t want higher taxes." - Bruce Rauner
  9. 9. “The internet is becoming the town square for the global village of tomorrow." - Bill Gates
  10. 10. “We must deal quickly with the fusion of the online world and the world of industrial pro- duction. In Germany, we call it Industrie 4.0.” -Angela Merkel
  11. 11. “The avoidance of taxes is the only intellectual pursuit that carries any reward." - John Maynard Keynes Metal | Pharmacy and Biotech | Aviation Component | Machinery | Ship Building | Automotive | Anorganic Chemical | Robotic | Infrastructure | Petrochemical | Electronic | Oil and Gas | Medic Equipment | Train | Power Plant | Organic Chemical | Pulp and Paper | Digital Economy
  12. 12. “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible." - Milton Friedman Switzerland Netherlands Indonesia
  13. 13. KITE Import Facilities for Export (KITE) also known as Fasilitas Kemudahan Impor Tujuan Ekspor shall be the facilities granted to exempt the import of goods and /or materials from import duty and/or excise, uncollected VAT and Sales Tax on Luxu- ry Goods (PPnBM), and/or to refund import duty and/or excise, uncollected PPN and PPnBM on the import of goods and/or materials, to process or assemble the goods and/or materials or fit the goods and/or materials on other goods to produce export goods. Custom and Tax Facilities for Small and Medium Industries. The Ministry of Finance has issued regulation number 177/PMK.04/2016 to pro- vide customs and VAT facilities for small and medium industries (IKM = Industri Kecil dan Menengah) that carry out export activity. This facility is intended to en- hance competitiveness of the local businesses and export of products by the small and medium-scale industries. These facilities can be applied by IKM with certain criteria, a business entity formed by several IKM, an IKM which is appointed by several IKMs in one —- IKM center, or Cooperative. The KITE facility includes: 1). Exemption of custom duty and VAT not-collected on importation of goods or materials to be processed, assembled, or installed on other goods intended for export and/ or delivery. 2). Exemption of customs duty and VAT not-collected on importation of machiner- ies, with the following conditions: *) to be used in development of the industry in the form of expansion (diversification) of products, modernization, rehabilitation, for the purpose of enhancing production capacity of the existing company or factory; and *) the machinery must be utilized in the production process for a minimum of two (2) years). More updates from the DGCE The Directorate General of Cus- tom and Excite aims and commits itself to become a modern custom. Substantial improvements have been implemented and continued to come into effects i.e. • Simplifying KITE Process • Rebranding Bonded Zone and e-KIE as transforming busi- ness process. • PLB Gen 2 (8 forms of PLB) • DGCE, LPEI, and UNIED re- search on Bonded Zone and KITE Contribution. • DGCE Income Realization per 31 Dec 2018 KITE process gets simplified; Slide was taken from DGCE presentation 19/02/2019 Stimulation Program on Export and Investment Verify & Trust Every service user must undergo a thorough verification check until 10 Documents Proof of ownership, NIK, etc. 30 working days in Special Regional of DGCE Manual Application verified Before Trust & Verify Every service user remain trusted until shown data discrepancy (verified) Industrial permit only 3 working days in KPPBC 1 hour in Special Regional of DGCE Online Application After Simplifying KITE process
  14. 14. PLB Gen 2 slide was taken from DGCE presentation 19/02/2019 Bonded Logistics Centers PLB = Pusat Logistik Berikat also known as Bonded Logistics Centers. Bonded Logistics Center serves as multi-function logistics warehouse for import and local goods by withholding the import duty and exempting value the added tax (PPN) and enabling operational flexibility. Indonesia is now developing a second generation of Bonded Logistic Centers (PLB Second Generation), as PLB First Generation was Considered a success in reducing logistic costs. “The goods that in the past were stored in Singapore now can be stored here at a lower cost. A businessman could cut the cost up to Rp. 7.18 million (US$ 502.60) per container,” said Director General of Customs and Excise Heru Pambudi. Many im- ported goods to be sent to Indonesia that previously had to be transited in Singapore port and Malaysia’s Portland in the past, now could be kept directly in Indonesia. PLB Second Generation would be regrouped into Large Industry PLB, Small and Me- dium Industry, E-Commerce, Basic Commodities, Air Hub Cargo, Floating Storage and Finished Goods. Stimulation Program on Export and Investment PLB Gen 2 (8 forms of PLB) PLB for Big Industry and PLB IKM Small and Medium Industry Goods to support these industries i.e. capital goods, raw materials, and components. PLB E-Commerce To amass goods being used and sold by e-commerce using e-commerce platform PLB Staples (Basic Commodities) To amass staples i.e. rice, soy, chili, shallot, sugar, cooking oil, flour, meat, eggs, fresh fishes at state borders . PLB Commodity Goods Exports To amass commodities for exports being traded through commodity exchanges or auction. PLB Air Hub Cargo to amass goods for transshipment located in Airport /Ground Support area . PLB Finished Goods. To amass MEA, or other finished goods following other relevant agencies. PLB Floating Storage To amass goods located at sea or rivers. More updates from the DGCE The Directorate General of Cus- tom and Excite aims and com- mits itself to become a modern custom. Substantial improve- ments have been implemented and continued to come into ef- fects i.e. • Simplifying KITE Process • Rebranding Bonded Zone and e-KIE as transforming business process. • PLB Gen 2 (8 forms of PLB) • DGCE, LPEI, and UNIED research on Bonded Zone and KITE Contribution. • DGCE Income Realization per 31 Dec 2018
  15. 15. Slide was taken from DGCE presentation 19/02/2019 More updates from the DGCE The Directorate General of Custom and Excite aims and commits itself to become a modern custom. Substantial improvements have been im- plemented and continued to come into effects i.e. • Simplifying KITE Process • Rebranding Bonded Zone and e-KIE as transforming business process. • PLB Gen 2 (8 forms of PLB) • DGCE, LPEI, and UNIED research on Bonded Zone and KITE Contribution. • DGCE Income Realization per 31 Dec 2018 Bonded Zones (KB) and KITE Contribution in 2017 Total Facilities : Rp. 57,28 trillion Total Export: Rp. 780,83 trillion Total Value Add (surplus + wages + depreciation + tax) Rp. 402,5 trillion Employment: 1.95 million Local : 97% Foreign:3% Contribution to National Export: 34.37% Export Import Ratio : KITE: 4.68 KB:2.15 Central Tax : Rp. 85,49 trillion KITE: 27% KB:73% Total of Business Net- work: 95,251 KITE: 27,017 Number of companies : KITE: 362 KB:1244 Investment: Rp. 178, 17 trillion KITE:39% KB:61% Local Tax : Rp. 5,11 trillion KITE: 35% KB:64% Indirect Economy Activity: 82.371 Accommodation Business 72.710 Trading Business 56.733 Food Business 56.685 Transportation Business Direktorat Jenderal Bea dan Cukai Kementerian Keuangan RI
  16. 16. This late Thursday, I was on my way home, when I passed by a long queue of GoCar (GoJek) in front of the Plaza Senayan. The other day I remember, I had to remind my driver to top up “e-money” for parking fare, and toll payment. Friday night, Bestia, my youngest daughter asked me whether I wanted to join her ordering GoFood. She seems to be excited for having a numerous GoJek “Promo” and eager to use up her GoPay bal- ance. GoPay Cash-backs or whatever they call it has apparently become a periodical promotional effort by this game-changer Unicorn. I am quite sure, the other 4 Unicorns are doing the same cam- paign effort in order to increase their transactional volume: Cashback, Discount, etc. Last Sunday, I joined my buddies for a fun walk in Senayan, and had my driver parked our car in GBK (Gelora Bung Karno), we too had to pay the parking fare using the e-money. I believe the Mandiri e-money or BCA Flash, or Tap Cash BNI are being used in all public facilities, which include the busway (Transjakarta), and the newly mega project in the city —the MRT --- it is estimated to be launched and fully operated in the 2nd week of March. Going “Cashless” has indeed become part of the City’s lifestyle. Cash payment has shrunk signifi- cantly in for our daily activities. We (Indonesian) were best known to use cash in our daily spend. While we have gotten used to the old saying “Cash is King”, it was inevitable for us to start inserting cards, installing e-wallet apps on our phones and surely shed away the existence of the fresh-n-crisp Rp.100,000 bill from our wallet. Going cashless has transformed our way to transact and struck a deal in so many ways. Being a part of this cashless society helps us become transparent and respon- sible financially --- reducing financial misconduct, increase the city’s revenue and monitor taxes, reducing volume of money counterfeit (fake rupiahs), minimizing germs or bacterial spread through exchanging money bills, and other countless positive sides of going cashless. While it affects all aspects in our daily lives, going cashless perhaps would help us do business transparently. It might just help us eradicate cor- ruption. Jakarta has indeed transformed into one of the world’s cashless cities, and now we are officially be- come a cashless society. Congrats! The Cashless Jakarta, Today Bambang Suwarso
  17. 17. Contact Us Phone: (62-21) 2929 5870-73 Bambang B. Suwarso bambang.suwarso@kib- Rachmat Kurniawan rachmat@kib- Yosefine Amelia yosefine@kib- Raden Roro Ratna Indah Wulandari wulan@kib- Address: The Koppel Building Suite IB. Jalan Pluit Selatan Raya no. 10 Jakarta Utara– 144550 Indonesia Disclaimer: The facts and opinions stated or expressed in this publication are for information purposes only, and are not necessary and/or must not be relied upon as being to those of the publisher or of the institu- tions for which the contributing authors work. Although every part of content has been taken to ensure the accuracy of the information contained within this publication, it should not be by any person relied upon as the basis for taking any action or making any decision. KIB Consulting and its representative, cannot be held liable or otherwise be responsible in anyway for any advice, action taken or decision made on the basis of the facts, surveys, and opinions stated or expressed within this publication.Indonesia—Australia CEPA Signing Ceremony at JS Luwansa 4 March 2019 Our Involvement DGT welcomes FKPK (Forum Kajian Pajak dan Kepabeanan) With Heru Pambudi, and Robert Pakpahan Elfi Wadri (KADIN) ,Brian Arnold –Chairman of Amcham At the 2019 Korean Business Dialogue