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“Not everyone can get
tested, since there are not
enough testing kits.”
~ Li Lanjuan, China’s Na-
tional Health Commis-
sion’s coronavirus commit-
tee ~ NY Post
In This Issue
• COVID-19 threats to
• Jakarta Flood-
• Omnibus law & tax
• Updates on VAT
• Our Involvement
Source: Thomas Peter | REUTERS
“No body knows when things will
begin to return to normal.”
A decade and a half ago, when the severe acute respiratory syndrome outbreak
known as SARS ra led the world. China accounted for a rela vely small part of
the global economy. Today, it is responsible for almost a ﬁ"h of global gross
domes c product when adjusted for incomes—more than the U.S.’s 15% by the
same measure, adding a morbid twist to the economic adage that when Ameri-
ca sneezes, the world catches a cold.
Source: The Wall Street Journal — Coronavirus Closes China To The World, Straining Glob-
KIB E-newsletter Feb 2020
In picture: A mother and her son arrive from Hubei province,
where the coronavirus was ﬁrst iden ﬁed, at a checkpoint on
the Jiujiang Yangtze River Bridge.
COVID-19 Threats to the Global Economy
From carmakers to airlines and hotels, the impact of the outbreak is punishing
“ The world is a book and those who do not travel read only one page.”
About 17% of Chi-
nese exports are
considered as inter-
mediate goods to
Accounts for 10.4% of
Global Gross Domes-
tic Product (GDP) and
10 % of Global em-
International tourist arrivals (overnight visi-
tors) worldwide grew 4% in 2019 to reach
2017 (+7%) ; 2018 (+6%); 2019 (+4%)
Increase in all regions : The Middle East
(+8%) , Asia Pacific (+5%). International
arrivals in Europe and Africa (+4%); USA
Based on current trends, economics pro-
spects and the UNWTO Confidence In-
dex, UNWTO forecast a 3—4% growth in
international tourists arrivals worldwide in
Jakarta Floor-Aﬀected Seek Compensa on
“I had seen people who had lost everything and everyone they loved to war, famine, and natural disasters.”
Indonesian Retail Merchants Associa on (APRINDO) es mated that retailers in Greater Jakarta have incurred
losses amoun ng to more than one trillion rupiah (US$71.6 million). The total amount does not include losses
faced by ten shopping malls and several tradi onal markets in the aﬀected areas.
The Na onal Development Planning Agency (Bappenas) es mates that losses due to the Greater Jakarta area
ﬂoods have reached around Rp 5.2 trillion
Consequently, several business owners have called on the Jakarta administra on to compensate them for the
losses they have suﬀered from the disaster.
Business owners expected the administra on to provide compensa on in the form of tax reduc ons, instead of
direct ﬁnancial coverage of their losses.
Sources: IDN Financial | TTG Asia | The Jakarta Post
Sellers move a mannequin and clothing rack out of the Cipinang Indah shopping center in East Jakarta during
massive flooding that hit across the city on Jan. 1. Source: Antara/Galih Pradipta | The Jakarta Post.
Minister of Finance Regula on
Land & building tax reduc ons may be granted to taxpayers experiencing liquidity issues due to commercial loss-
es of up to 75% of unbound L&B tax; and if the taxpayer experiences natural disasters, ﬁre, disease outbreaks,
riots or anarchist acts, the L&B tax reduc on of up to 100 % may be given
The DGT may also deduct a land & building tax administra ve ﬁne of 25% from the taxable principal stated in the
Tax Assessment Le er of the land & building tax; or a 2% monthly administra ve ﬁne set in the L&B Tax Collec-
on Le er; if the taxpayer forgets, has liquidity diﬃcul es, is exposed to natural disasters or other causes which
are not the taxpayer's fault.
Director General of Tax Decision (KEP 537/PJ./2000)
Calcula ng tax installment (tax income art. 25) in certain condi ons
“Of all the hardships of a person had to face, none was more punishing than the simple act of waiting”
In respond to the flood repercussion that has been affected businesses’ operational, substan-
tial cost surge, and diminishing profit, while anticipating the on-going COVID-19 impact
throughout the year 2020 to businesses, it is only wise for businesses to start projecting their
losses and apply for tax installment (pph 25) reduction.
About PPh 25.
Monthly tax instalments (article 25 income tax) constitute the first part of tax payments to be
made by residents taxpayers and Indonesian Pes as a prepayment of their current year Cor-
porate Income Tax liability. A monthly tax instalment is generally calculated using the most
recent Corporate Income Tax Return.
KEP-537/PJ/2000 art 1 point 6 says: “Occurring changes that happen to taxpayers’ busi-
nesses and operational” and art. 7 point 1. suggesting that taxpayers who have undergone
situational changes on their businesses and if the amount of income tax is less than 75% of
the income tax payable in three months or over in a tax year are permitted to submit an appli-
cation for reducing the amount of income tax pph. 25
What’s next ?
Submit your Annual Corporate Income Tax Return 2019 as soon as possible
Do your own business projection (potential losses)
Write a letter of application for pph. 25 reduction to the DGT office (KPP)
where your business is registered
Omnibus Law & Tax Planning
“Real lobbying reform must end the practice of corporate lobbyist writing our laws”
- Marty Meehan
On Wed, Feb 5, 2020, The government submi ed the controversial omnibus bill on job crea on to the House of
Representa ves. The bill is expected to start delibera ons on law reforms that are intended to accelerate busi-
ness, a ract investors, boost economic growth and create jobs.
One of the key points worth considering is the reduction in corporate income
tax, which requires a proper Tax Planning.
More details regarding the draft of Omnibus Law can be referred on the previous issue of KIB Tax
Flash– December 2019.
Tax planning helps you to plan ahead in alloca ng your company’s taxable income as prescribed
by the Omnibus Law
“ “The avoidance of taxes is the only intellectual pursuit that carries any reward.”
-John Maynard Keynes
Deﬁni on: Tax Planning is minimizing your tax liability by making the best use of all available deduc ons,
allowances, rebates, thresholds, etc as permi ed by income tax laws, rules s pulated by the government
of a country.
• The main core of tax planning is to reduce the amount of tax you pay by taking full beneﬁt of all availa-
ble deduc ons.
• It helps in saving some extra bucks out of your monthly earnings which you can use to invest in other
lucra ve investment opportuni es and generate a handsome amount of returns over that surplus
• Eliminate unnecessary stress and uncertainty by knowing just what your tax liability will be and make
informed decisions, ul mately obtaining peace of mind.
• The earlier in your professional/business journey you start tax planning, the more strategies you can
explore to maximize the eﬀects of tax planning.
• They help in learning about the ps and tricks of tax laws, diﬀerent tax minimiza on techniques which
ul mately helps in tax compliance and eﬀec ve adherence to tax laws as s pulated by the govern-
• Tax planning when clearly dis nguished with tax avoidance/tax evasion leads to lesser interac on with
tax authori es and unnecessary li ga ons as well.
• Help you to plan submi:ng your corporate annual tax return to be in line with your overall compa-
ny’s performance —— saving tax payment through tax installment (pph. Art. 25)
Start to implement a strategy
to minimize your tax burden
“A law is valuable, not because it is a law, but because there Is right in it .”
-Henry Ward Beecher
Main Provisions of Omnibus Tax Bill,” by Suryo Utomo, DGT , 26 February 2020
duction in Cor-
Tax rates by
22% (2021 &
2022) and 20%
Income tax rates
for Go Public
Income Tax on
Income Tax Arti-
cle 26 Rate on
sions in Tax-
5. Offshore in-
dividends) is not
subject to in-
come tax as
long as it is
invested in In-
6. Resident ex-
only taxed on
citizens living for
less than 183
days in Indone-
sia may become
living for more
than 183 days
• digital plat-
forms are as-
signed to col-
of Local Taxes:
of regional tax
rates that ap-
• Evaluation of
13. Relaxed deter-
mination of types
of excisable goods
9. Relaxation of
Input Tax Cred-
iting Rights for
• Tax, Cus-
14. Tax Incen-
• Tax holiday
• Super de-
• Income Tax
• Income tax
• Regional Tax
the Heads of
Affected Laws: Income Tax, VAT, GPTP, Custom & Excise, PDRD, Local Government
SE-02/PJ/2020 Credi ng Value-Added Tax Input on Diﬀerent Tax Period
“ Taxes are paid in the sweat of every man who labors.”
- Franklin D. Roosevelt
a. to give uniformity in understanding VAT credit
mechanism (input VAT) as regulated on UU no. 8/
1983 ar cle 9 regarding Value Added Tax on Goods
and services and VAT on luxurious goods, which was
last updated in 2009 by UU no. 42/ (UU PPN); and
b. to give a sense of fairness to VAT registered Entre-
preneurs in exercising rights of VAT input credit on
taxable goods and service.
to reaﬃrm discrepancies of VAT input credit against
its periodical tax (Masa Pajak) as regulated on UU
PPN ar cle 9 (9)
Subjects Deﬁni on
Must charge VAT on their goods or services and may reclaim any VAT
they have paid on business-related goods or services.
VAT Output VAT charged on sales
VAT Input VAT charged on purchases
VAT tax return Monthly (Masa)
1 VAT input recorded in a certain Masa must be credited with VAT Output in the same Masa
VAT input which has not been credited with VAT output on the same Masa, then can be credited in
the next Masa within 3 (three) months a"er the presiding Masa ends.
Pending credit on VAT input is possible due to late Tax invoice receipt.
In the event when the 3 (three) months period passes (no. 2) then VAT input credit can then be
proceeded through the SPT Masa PPN amendments.
The VAT Input credit as s pulated on no. 1 and 2 will also comply to VAT input as stated on certain
documents which equivalent with Tax Invoice - as regulated on UU PPN art. 13 (6)
The VAT Input as s pulated on no. 1, 2, and 4 is only applicable in :
A. the event of VAT Input has not been posted as expenses or it is not being capitalized into the
Taxable Goods & Services
B. There has not been any audit on the VAT-registered Entrepreneur
InTalk #1 on reforming the insurance industry - Jiwasraya case
The Deputy Permanent Commi ee (Komtap) for the Asia-Paciﬁc Chambers of Commerce and Indus-
try (Kadin), Bambang B. Suwarso said to Akurat.co Thursday night (02/07/2020): “It is necessary to
proceed reforma on in the Indonesian insurance industry”. Nevertheless, Bambang emphasized
that the stem problem in the insurance industry did not just emerged recently, instead it has been
lingered for a while. In response to the troubled state-owned insurer PT Asuransi Jiwasraya, and the
newest PT Asabri (Persero), Bambang reiterates President Widodo’s recommenda on to OJK that
signiﬁcant reforma on and changes are crucial to be implemented in the non-banking ﬁnancial in-
s tu ons i.e. insurance, and pension funds. We also need to transform ﬁt-and-proper test within
the ins tu ons, embrace changes in human resources, and technology and most importantly that
the law and regula on must be upheld while transparency should not be compromised at all me.
At a meeting forum with Indonesian Steel Industry Association and PT. PLN (Persero)
As a member of Indonesian delegation team at the CYBERTECH GLOBAL
TLV 2020 | Tel Aviv, Israel | Jan 28-30, 2020.
(62-21) 2929 5870-73
Bambang B. Suwarso
Raden Roro Ratna
North Jakarta —144550 Indonesia
The Koppel Building Suite IB.
Jalan Pluit Selatan Raya no. 10
Gold Coast Tower Eiffel Unit N
Pantai Indah Kapuk
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.
Promoting Singapore—Indonesia Investment Cooperation (KADIN)