The document discusses various topics relating to taxation, including the threats of the COVID-19 outbreak and floods in Jakarta to the global and local economies, tax planning strategies under Indonesia's new Omnibus Law, and guidelines on crediting value-added tax inputs across different tax periods according to SE-02/PJ/2020. Retailers affected by Jakarta floods are seeking tax reductions and compensation from the local administration for their losses.
One of the key issues highlighted on our end-year KIB Consulting e-news edition is to help our clients in identifying and understanding today’s business landscape and its ongoing risks. The headline was excerpted from the World Economic Forum insight report of Regional Risks for Doing Business 2018.
Indonesia's economy contracted significantly in the second quarter of 2020 due to the COVID-19 pandemic. GDP declined 5.32% year-over-year and 4.19% quarter-over-quarter, marking the first contraction since the 1998 Asian financial crisis. This decline was deeper than predicted. One factor was a 5.51% decrease in household consumption, with declines in most consumption categories except housing/home appliances and health/education. The economic downturn has pushed several countries into recession and may continue affecting investment, production, employment and purchasing power. To support economic recovery, the Indonesian government expanded tax incentives and introduced regulations allowing alternative bases for VAT collection from foreign digital companies and farmers.
The document summarizes new tax regulations and incentives in Indonesia in response to the COVID-19 pandemic. President Joko Widodo declared a public health emergency on March 31st and has called for social distancing. New regulations have provided tax breaks for certain industries, extended tax filing deadlines, and exempted or reduced taxes on imports of medical supplies. The government aims to support the economy through these fiscal measures during the crisis.
The document summarizes initiatives from the Directorate General of Taxation and the Directorate General of Customs and Excise in Indonesia. It discusses their pledge to integrate data networks and improve services through a 5-year synergy program. It also outlines recent tax reforms and simplifications to tax return processes. These include allowing "nil" returns to not require submission and expanding channels to submit returns. The Directorate General of Customs and Excise is developing a second generation of Bonded Logistics Centers to reduce logistic costs and aims to become a more modern customs agency through ongoing improvements.
The document provides information on recent tax law developments in Indonesia, including:
1) The government is proposing an omnibus law to reform the tax system to boost investment and economic growth. Key reforms include gradually lowering the corporate tax rate and eliminating dividend tax.
2) Current rules impose a maximum debt-to-equity ratio of 4:1 for tax purposes. Interest expenses above this ratio are not tax deductible.
3) KIB Consulting, a tax advisory firm, summarizes these tax law changes and notes its involvement in discussions with government on investment issues and the omnibus law.
- The document discusses Indonesia's economic and fiscal updates under President Joko Widodo's 2019-2024 vision of improving connectivity and infrastructure. Key points include GDP growth slowing to a 2-year low of 5.05% in Q2 2019 due to weaker investment. Exports fell while imports declined faster, helping GDP. The US-China trade war has boosted Vietnam's economy but widened Indonesia's trade deficit. Solutions proposed include improving competitiveness, workforce skills, and commodity value-addition. The DGT outlines new tax regulations like tax holidays and super deductions to promote investment and employment.
This document provides an overview of digital economy and e-commerce in Indonesia. It discusses how Indonesia has the highest rate of e-commerce use globally with 90% of internet users purchasing products online. However, the average spending per online shopper is relatively low at $89 USD. It also summarizes Indonesia's position as the largest internet economy in Southeast Asia valued at $40 billion growing at 49% CAGR. The document outlines some of the key regulations around e-commerce taxation in Indonesia and proposes changes through an omnibus law to tax foreign digital companies without a physical presence. It also advertises the tax diagnostic review services of KIB Consulting and the opening of their new branch office in North Jakarta.
Indonesia's economy is entering a recession due to negative quarterly growth predictions between -1.7% to -0.6% in Q3 2020. State revenue from January to August declined 13.1% from the same period in 2019. Entering a recession will impact unemployment and purchasing power. COVID-19 cases continue rising. Jakarta will tighten social restrictions for two weeks from September 14, limiting transportation, gatherings, dine-in restaurants, and office/school capacity to 50%. The new e-Faktur 3.0 will replace the outdated version on October 1, providing prepopulated import, tax return, and stamp code data to help businesses fill out tax forms.
One of the key issues highlighted on our end-year KIB Consulting e-news edition is to help our clients in identifying and understanding today’s business landscape and its ongoing risks. The headline was excerpted from the World Economic Forum insight report of Regional Risks for Doing Business 2018.
Indonesia's economy contracted significantly in the second quarter of 2020 due to the COVID-19 pandemic. GDP declined 5.32% year-over-year and 4.19% quarter-over-quarter, marking the first contraction since the 1998 Asian financial crisis. This decline was deeper than predicted. One factor was a 5.51% decrease in household consumption, with declines in most consumption categories except housing/home appliances and health/education. The economic downturn has pushed several countries into recession and may continue affecting investment, production, employment and purchasing power. To support economic recovery, the Indonesian government expanded tax incentives and introduced regulations allowing alternative bases for VAT collection from foreign digital companies and farmers.
The document summarizes new tax regulations and incentives in Indonesia in response to the COVID-19 pandemic. President Joko Widodo declared a public health emergency on March 31st and has called for social distancing. New regulations have provided tax breaks for certain industries, extended tax filing deadlines, and exempted or reduced taxes on imports of medical supplies. The government aims to support the economy through these fiscal measures during the crisis.
The document summarizes initiatives from the Directorate General of Taxation and the Directorate General of Customs and Excise in Indonesia. It discusses their pledge to integrate data networks and improve services through a 5-year synergy program. It also outlines recent tax reforms and simplifications to tax return processes. These include allowing "nil" returns to not require submission and expanding channels to submit returns. The Directorate General of Customs and Excise is developing a second generation of Bonded Logistics Centers to reduce logistic costs and aims to become a more modern customs agency through ongoing improvements.
The document provides information on recent tax law developments in Indonesia, including:
1) The government is proposing an omnibus law to reform the tax system to boost investment and economic growth. Key reforms include gradually lowering the corporate tax rate and eliminating dividend tax.
2) Current rules impose a maximum debt-to-equity ratio of 4:1 for tax purposes. Interest expenses above this ratio are not tax deductible.
3) KIB Consulting, a tax advisory firm, summarizes these tax law changes and notes its involvement in discussions with government on investment issues and the omnibus law.
- The document discusses Indonesia's economic and fiscal updates under President Joko Widodo's 2019-2024 vision of improving connectivity and infrastructure. Key points include GDP growth slowing to a 2-year low of 5.05% in Q2 2019 due to weaker investment. Exports fell while imports declined faster, helping GDP. The US-China trade war has boosted Vietnam's economy but widened Indonesia's trade deficit. Solutions proposed include improving competitiveness, workforce skills, and commodity value-addition. The DGT outlines new tax regulations like tax holidays and super deductions to promote investment and employment.
This document provides an overview of digital economy and e-commerce in Indonesia. It discusses how Indonesia has the highest rate of e-commerce use globally with 90% of internet users purchasing products online. However, the average spending per online shopper is relatively low at $89 USD. It also summarizes Indonesia's position as the largest internet economy in Southeast Asia valued at $40 billion growing at 49% CAGR. The document outlines some of the key regulations around e-commerce taxation in Indonesia and proposes changes through an omnibus law to tax foreign digital companies without a physical presence. It also advertises the tax diagnostic review services of KIB Consulting and the opening of their new branch office in North Jakarta.
Indonesia's economy is entering a recession due to negative quarterly growth predictions between -1.7% to -0.6% in Q3 2020. State revenue from January to August declined 13.1% from the same period in 2019. Entering a recession will impact unemployment and purchasing power. COVID-19 cases continue rising. Jakarta will tighten social restrictions for two weeks from September 14, limiting transportation, gatherings, dine-in restaurants, and office/school capacity to 50%. The new e-Faktur 3.0 will replace the outdated version on October 1, providing prepopulated import, tax return, and stamp code data to help businesses fill out tax forms.
The document discusses several key points regarding taxation in Indonesia:
1. The government plans to increase the VAT rate from 10% to 12% and impose a minimum 1% tax on companies that suffer losses based on gross income.
2. The largest trade bloc RCEP that Indonesia joined could enable more exports to China by lowering tariffs and trade barriers between the two countries.
3. Promoting Indonesian products in China poses challenges but opportunities exist in partnering with local businesses, integrating with Chinese e-commerce platforms, and product placements in popular media. However, political tensions could impact trade.
4. A draft law amendment would eliminate criminal penalties for tax evasion and prioritize administrative fines instead.
The document discusses Indonesia potentially implementing a "Go Big" stimulus plan, similar to the $1.9 trillion stimulus plan proposed in the US. It provides details on Indonesia's fiscal and monetary stimulus implemented in 2020, totaling over Rp1000 trillion. It also discusses proposals for Indonesia to implement further stimulus measures, including an automotive tax discount and encouraging electric vehicle purchases. However, it notes concerns that large stimulus could increase debt levels and inflation. Overall it analyzes the pros and cons of Indonesia pursuing an additional large "Go Big" stimulus.
The Covid-19 pandemic has slowed global and national economic growth in 2020, with Indonesia projected to have economic growth of -0.4% to 1%. The pandemic has caused many changes including people working and learning from home to prevent the spread of the virus. A "new normal" is being implemented where economic activities resume but with added health protocols.
The document summarizes key points about Indonesia's Omnibus Law on Job Creation. It was passed by the House of Representatives to simplify regulations and encourage economic growth. The law aims to help Indonesia achieve 6-8% annual growth to create jobs and exit the middle income trap by 2045. It consolidates over 70 laws and over 1000 articles focusing on simplifying business licensing, enhancing investment, employment protections, and empowering small businesses. The law faces some opposition from labor groups but is intended to revive Indonesia's economy amid the pandemic.
This document discusses potential strategies for Indonesia to accelerate economic growth post-pandemic. It suggests focusing on human capital development through improving education, increasing spending on research and development, and supporting small and medium enterprises. Education reform ideas include emulating Finland's approach of fostering creativity over rote learning. R&D spending in Indonesia is currently low at 0.22% of GDP and needs to increase. SMEs employ most workers but were impacted by the pandemic, so policies like the UK's furlough program could help prevent rising unemployment. Developing local consumption of domestic products would also support SME growth and investment. Mergers between major tech startups Gojek and Grab or Tokopedia are mentioned as possibilities to
The summary is:
The Indonesian government has launched a Voluntary Tax Disclosure Program (PPS) from January to June 2022 to allow taxpayers to disclose previously unreported tax obligations. The PPS has two conditions - condition 1 is for those who participated in the 2016 tax amnesty but did not report all assets, while condition 2 is for individual taxpayers with unreported assets from 2016-2020. The PPS allows disclosure of assets in exchange for payment of final income tax rates ranging from 6-18% depending on the type of assets and conditions. The government has also increased individual income tax rates and VAT this year as part of tax reforms.
Singapore's economy is facing challenges of an aging population and low birth rates, causing a shrinking workforce. This has led the government to shift its policy focus from immigration to improving productivity. However, public protests emerged against the government's proposal to accommodate increased immigration. In response, the government implemented a more restrictive immigration policy and productivity incentives. But continued workforce constraints may limit economic growth and increase inflationary pressures over time.
Impact of Taxes on Revenue Generation in Nigeria (A Study of Federal Government)ijtsrd
This paper investigated the effect of taxes on revenue generation in Nigeria from 1981 to 2016, a period of thirty five 35 years and the data for the analysis were sourced from Central Bank of Nigeria's CBN, 2016 Statistical Bulletin. The variables used include total federally collected revenue as a proxy for revenue generation, labour, gross capital formation, company income tax, petroleum profit tax, personal income tax, value added tax, custom and excise tax, direct tax and indirect tax. Fully modified ordinary least squares method FMOLS was employed to determine the direction and the magnitude of impacts. Based on the effect of direct tax on revenue generation in Nigeria, both company income tax and personal income tax boost revenue generation in Nigeria while petroleum profit tax discourage revenue generation in Nigeria. Also, model on the effect of indirect tax on revenue generation showed that the two variables used as indirect tax variable value added tax and custom and excise tax have positive and significant effect on revenue generation in Nigeria. Lastly, the researchers found out that the estimated result on the effect of direct and indirect tax on revenue generation in Nigeria showed that indirect tax lead to revenue generation in Nigeria while direct tax does not and this is so because most people pay indirect tax in Nigeria than direct tax. Also, tax evasion and avoidance are very minimal in indirect tax and this lead to more revenue which encourage economic growth in Nigeria. The researchers recommended that it is important that efficient and effective tax policy be implemented to ensure that enough revenue is generated for growth purposes like strict penalties should be meted to people who avoid and evade tax payments. Government should base her taxes on indirect tax because this will not create any burden on the citizen and in this way, it will lead to growth. Olaleye John Olatunde | Salome Olabimpe Ajayi "Impact of Taxes on Revenue Generation in Nigeria (A Study of Federal Government)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29514.pdfPaper URL: https://www.ijtsrd.com/economics/other/29514/impact-of-taxes-on-revenue-generation-in-nigeria-a-study-of-federal-government/olaleye-john-olatunde
This Memorandum summarizes an overview of economy for the year 2015-2016 and the important changes proposed through the Finance Bill 2016. It contains comments on the budget and on the Finance Bill 2016, including highlights of the changes brought through the Income Tax Ordinance, 2001, the Sales Tax Act, 1990, the Federal Excise Act, 2005, the Customs Act, 1969, the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 and Fiscal Responsibility and Debt Limitation Act, 2005. The amendments proposed through the Income Tax Ordinance, 2001 and through other laws are intended to be effective once the parliament has accorded its assent and thereafter, would be effective from July 01, 2016 i.e. tax year 2017 unless otherwise indicated.
This Memorandum is intended to provide general guidance to the readers on the important changes brought through the Bill and should not be considered as a substitute for specific advice relating to a particular enactment. For considering the precise effect of a proposed change, reference should be made to the appropriate wordings in the relevant statutes and the notifications issued where relevant.
Corporate Tax Reforms in Pakistan
Tax policy plays an important part in inclusive growth, incomes and wealth redistribution. Owing to a narrow tax base in Pakistan, the ability of taxes to alter distribution of incomes in favour of the poorest income quintiles has been limited. This paper specifically makes a case where private sector has been realizing anticipated profits however their rising incomes did not result in progressive changes in tax contribution. The ability of tax administrative machinery to check evasion has also remained weak.
Another important matter is how a distortive tax policy is preventing entry of new firms and investments which can potentially create greater competition and enhance consumer surplus. Since 2007 Pakistan’s economy has been witnessing low levels of investment. Despite low interest rates, the private sector credit has not picked up. The exports have declined during a period when Pakistan enjoys preferential market access from the European Union and the United States. While large firms operating domestically continue to growth, the survival and growth of new firms is weak.
According to several recent studies, part of the answer to this problem may lies in the way taxes are helping cartelization through exemptions and preferences in the direct (corporate) tax structure. We discuss this view in the light of recent tax directory published by the Federal Board of Revenue. Making use of the key informant interviews and focus group discussions involving the business community, tax officials, trade and consumer associations, we present some recommendations for the reform of corporate taxation in Pakistan.
The memorandum proposes several tax reforms and government financing measures for the 2012/2013 national budget. It recommends a flat individual income tax rate of 20-25% along with eliminating double taxation of income. It also suggests reducing business taxes for small and medium Kenyan enterprises and those in manufacturing. Further, it proposes replacing VAT with a general sales tax, zero-rating duties on essential foods, borrowing through Islamic bonds for infrastructure and Eurobonds for other expenditures. Finally, it recommends pegging the Kenyan shilling to a basket of currencies and hedging prices for major exports.
The document discusses key concepts related to fiscal policy and government budgets in India. It defines fiscal policy as the use of government spending and taxation to influence the economy. It outlines the different types of fiscal policy including expansionary, contractionary, and neutral fiscal policy. It also discusses important budget concepts like revenue budget, capital budget, revenue receipts, revenue expenditure, capital receipts, capital expenditure, budget deficit, fiscal deficit, primary deficit, and public debt. The document emphasizes the need for fiscal discipline and tax reforms in India to address issues like high fiscal and revenue deficits.
The document provides an overview and analysis of the Indian economy based on the Economic Survey 2016-17. Some key points:
1. The survey uses "Big Data" for the first time, analyzing goods and people movement across India from GSTN data.
2. Growth rates in 2016-17 are estimated at 7% overall, with agriculture at 4.1%, industry at 5.2%, and services at 8.8%.
3. Major events of the period include demonetization, GST implementation, setting up of the Monetary Policy Committee, and cleaning bank balance sheets of NPAs.
4. Key economic indicators show declining fiscal deficit, narrowing current account deficit, increasing F
OBJECTIVE
The Corona virus pandemic is posing a severe health and humanitarian crisis across the globe. It has also brought an unexpected economic shock to the global economy and initiated a crisis which would burden nations for years to come. In this Webinar, we shall look at various policy measures being taken in response to the crisis at the national and international levels. The webinar will also highlight possible fiscal measures that can be adopted to respond to the economic crisis caused by COVID-19.
Ahmed, V., Amin, S., Bakhtiar, U., Javed, A. (2021) ‘Government Pension and Fiscal Sustainability in Khyber Pakhtunkhwa,’ Sustainable Energy and Economic Development (SEED) Programme:
Islamabad.
India Budget 2018 ...Changing Landscape - An Analysis by K. C. Mehta & Co.Prashant Kotecha
This document provides an overview and summary of the key aspects of the Indian economy based on the Economic Survey of 2017-18. Some of the main points covered in the 3 sentences are:
1) The Economic Survey analyzed the Indian economy using big data from sources like GST, EPFO, ESIC to provide new perspectives on economic indicators and issues like the gender gap.
2) Key findings included that over 30% of non-agricultural jobs were in the formal sector based on social security enrollment, states' prosperity correlated more strongly with international trade than domestic trade, and the agricultural sector is becoming more feminized.
3) The document also summarizes fiscal trends like tax revenue growth and deficits,
The document provides an overview and outlook for the Indian economy and fiscal year 2018. Some key points:
1. The economic survey for 2016-2017 used big data analytics to gain new insights about the economy, such as estimates of annual work-related migration being double previous census figures.
2. Growth in the first half of FY2017 slowed to 7.2% due to a sharp decline in fixed investment. Inflation moderated as food prices decreased. The external position remains robust.
3. For FY2018, growth is expected to remain in the 6.75-7.5% range. Exports are expected to recover as global growth increases. Private consumption growth is uncertain due to
This document discusses Pakistan's response to and challenges from the COVID-19 pandemic. It notes that Pakistan's economy is projected to contract by 1.5% in 2020 due to lockdown measures affecting jobs and businesses. Pakistan's response has included expanding social safety nets, loans for small businesses, and stimulus for the construction sector. Key challenges include relaxing lockdowns safely, increasing healthcare capacity as cases rise, and ensuring social programs reach all in need. The document argues Pakistan must enhance domestic resource mobilization to finance COVID response and recovery given constraints on foreign aid.
This document summarizes a chapter that examines issues with Pakistan's taxation system and proposes recommendations for tax harmonization across provinces. The chapter identifies a lack of coordination between federal and provincial tax authorities that results in duplicate taxation and increased costs for businesses. It also notes outdated tax bases and rates on services, property, agriculture and other sectors. The chapter recommends creating an oversight agency to enhance cooperation among federal and provincial governments. It also suggests revising taxable services, clearly defining taxation criteria, and establishing a mechanism for modifying tax revenues. The goal is to forge consensus on reforms and have a cohesive taxation framework that supports business growth and governmental objectives.
Effect of vat and tax on economy an analysis in the context of bangladesh.Alexander Decker
This document summarizes a research paper on the effects of taxes and VAT on the economy of Bangladesh. It provides background on VAT and how it has replaced sales taxes in Bangladesh. It discusses the country's current tax policies, including income tax rates that are progressive up to 25% and a uniform 15% VAT rate. It analyzes how the tax system affects people in Bangladesh, noting the heavy reliance on indirect taxes results in a small number of taxpayers shouldering the burden. The narrow tax base and exemptions are also issues. In conclusion, broadening the tax base is desirable but agricultural income exemptions need reconsideration given many affluent people claim agricultural income to avoid taxes.
The document discusses the potential introduction of taxation in the UAE. Due to declining oil prices and increasing fiscal pressures, the UAE government is considering implementing taxes like VAT and CIT to diversify government revenue sources. The IMF recommends a low, broad-based VAT of around 5% and lowering the corporate tax rate from 20% to 10% while expanding its scope. The government is also exploring other options like taxes on vehicles, fees, and reducing energy and water subsidies. Officials say taxes will likely be implemented at low rates to minimize economic impacts, but agreements are still being reached across GCC countries.
The document discusses several key points regarding taxation in Indonesia:
1. The government plans to increase the VAT rate from 10% to 12% and impose a minimum 1% tax on companies that suffer losses based on gross income.
2. The largest trade bloc RCEP that Indonesia joined could enable more exports to China by lowering tariffs and trade barriers between the two countries.
3. Promoting Indonesian products in China poses challenges but opportunities exist in partnering with local businesses, integrating with Chinese e-commerce platforms, and product placements in popular media. However, political tensions could impact trade.
4. A draft law amendment would eliminate criminal penalties for tax evasion and prioritize administrative fines instead.
The document discusses Indonesia potentially implementing a "Go Big" stimulus plan, similar to the $1.9 trillion stimulus plan proposed in the US. It provides details on Indonesia's fiscal and monetary stimulus implemented in 2020, totaling over Rp1000 trillion. It also discusses proposals for Indonesia to implement further stimulus measures, including an automotive tax discount and encouraging electric vehicle purchases. However, it notes concerns that large stimulus could increase debt levels and inflation. Overall it analyzes the pros and cons of Indonesia pursuing an additional large "Go Big" stimulus.
The Covid-19 pandemic has slowed global and national economic growth in 2020, with Indonesia projected to have economic growth of -0.4% to 1%. The pandemic has caused many changes including people working and learning from home to prevent the spread of the virus. A "new normal" is being implemented where economic activities resume but with added health protocols.
The document summarizes key points about Indonesia's Omnibus Law on Job Creation. It was passed by the House of Representatives to simplify regulations and encourage economic growth. The law aims to help Indonesia achieve 6-8% annual growth to create jobs and exit the middle income trap by 2045. It consolidates over 70 laws and over 1000 articles focusing on simplifying business licensing, enhancing investment, employment protections, and empowering small businesses. The law faces some opposition from labor groups but is intended to revive Indonesia's economy amid the pandemic.
This document discusses potential strategies for Indonesia to accelerate economic growth post-pandemic. It suggests focusing on human capital development through improving education, increasing spending on research and development, and supporting small and medium enterprises. Education reform ideas include emulating Finland's approach of fostering creativity over rote learning. R&D spending in Indonesia is currently low at 0.22% of GDP and needs to increase. SMEs employ most workers but were impacted by the pandemic, so policies like the UK's furlough program could help prevent rising unemployment. Developing local consumption of domestic products would also support SME growth and investment. Mergers between major tech startups Gojek and Grab or Tokopedia are mentioned as possibilities to
The summary is:
The Indonesian government has launched a Voluntary Tax Disclosure Program (PPS) from January to June 2022 to allow taxpayers to disclose previously unreported tax obligations. The PPS has two conditions - condition 1 is for those who participated in the 2016 tax amnesty but did not report all assets, while condition 2 is for individual taxpayers with unreported assets from 2016-2020. The PPS allows disclosure of assets in exchange for payment of final income tax rates ranging from 6-18% depending on the type of assets and conditions. The government has also increased individual income tax rates and VAT this year as part of tax reforms.
Singapore's economy is facing challenges of an aging population and low birth rates, causing a shrinking workforce. This has led the government to shift its policy focus from immigration to improving productivity. However, public protests emerged against the government's proposal to accommodate increased immigration. In response, the government implemented a more restrictive immigration policy and productivity incentives. But continued workforce constraints may limit economic growth and increase inflationary pressures over time.
Impact of Taxes on Revenue Generation in Nigeria (A Study of Federal Government)ijtsrd
This paper investigated the effect of taxes on revenue generation in Nigeria from 1981 to 2016, a period of thirty five 35 years and the data for the analysis were sourced from Central Bank of Nigeria's CBN, 2016 Statistical Bulletin. The variables used include total federally collected revenue as a proxy for revenue generation, labour, gross capital formation, company income tax, petroleum profit tax, personal income tax, value added tax, custom and excise tax, direct tax and indirect tax. Fully modified ordinary least squares method FMOLS was employed to determine the direction and the magnitude of impacts. Based on the effect of direct tax on revenue generation in Nigeria, both company income tax and personal income tax boost revenue generation in Nigeria while petroleum profit tax discourage revenue generation in Nigeria. Also, model on the effect of indirect tax on revenue generation showed that the two variables used as indirect tax variable value added tax and custom and excise tax have positive and significant effect on revenue generation in Nigeria. Lastly, the researchers found out that the estimated result on the effect of direct and indirect tax on revenue generation in Nigeria showed that indirect tax lead to revenue generation in Nigeria while direct tax does not and this is so because most people pay indirect tax in Nigeria than direct tax. Also, tax evasion and avoidance are very minimal in indirect tax and this lead to more revenue which encourage economic growth in Nigeria. The researchers recommended that it is important that efficient and effective tax policy be implemented to ensure that enough revenue is generated for growth purposes like strict penalties should be meted to people who avoid and evade tax payments. Government should base her taxes on indirect tax because this will not create any burden on the citizen and in this way, it will lead to growth. Olaleye John Olatunde | Salome Olabimpe Ajayi "Impact of Taxes on Revenue Generation in Nigeria (A Study of Federal Government)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29514.pdfPaper URL: https://www.ijtsrd.com/economics/other/29514/impact-of-taxes-on-revenue-generation-in-nigeria-a-study-of-federal-government/olaleye-john-olatunde
This Memorandum summarizes an overview of economy for the year 2015-2016 and the important changes proposed through the Finance Bill 2016. It contains comments on the budget and on the Finance Bill 2016, including highlights of the changes brought through the Income Tax Ordinance, 2001, the Sales Tax Act, 1990, the Federal Excise Act, 2005, the Customs Act, 1969, the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 and Fiscal Responsibility and Debt Limitation Act, 2005. The amendments proposed through the Income Tax Ordinance, 2001 and through other laws are intended to be effective once the parliament has accorded its assent and thereafter, would be effective from July 01, 2016 i.e. tax year 2017 unless otherwise indicated.
This Memorandum is intended to provide general guidance to the readers on the important changes brought through the Bill and should not be considered as a substitute for specific advice relating to a particular enactment. For considering the precise effect of a proposed change, reference should be made to the appropriate wordings in the relevant statutes and the notifications issued where relevant.
Corporate Tax Reforms in Pakistan
Tax policy plays an important part in inclusive growth, incomes and wealth redistribution. Owing to a narrow tax base in Pakistan, the ability of taxes to alter distribution of incomes in favour of the poorest income quintiles has been limited. This paper specifically makes a case where private sector has been realizing anticipated profits however their rising incomes did not result in progressive changes in tax contribution. The ability of tax administrative machinery to check evasion has also remained weak.
Another important matter is how a distortive tax policy is preventing entry of new firms and investments which can potentially create greater competition and enhance consumer surplus. Since 2007 Pakistan’s economy has been witnessing low levels of investment. Despite low interest rates, the private sector credit has not picked up. The exports have declined during a period when Pakistan enjoys preferential market access from the European Union and the United States. While large firms operating domestically continue to growth, the survival and growth of new firms is weak.
According to several recent studies, part of the answer to this problem may lies in the way taxes are helping cartelization through exemptions and preferences in the direct (corporate) tax structure. We discuss this view in the light of recent tax directory published by the Federal Board of Revenue. Making use of the key informant interviews and focus group discussions involving the business community, tax officials, trade and consumer associations, we present some recommendations for the reform of corporate taxation in Pakistan.
The memorandum proposes several tax reforms and government financing measures for the 2012/2013 national budget. It recommends a flat individual income tax rate of 20-25% along with eliminating double taxation of income. It also suggests reducing business taxes for small and medium Kenyan enterprises and those in manufacturing. Further, it proposes replacing VAT with a general sales tax, zero-rating duties on essential foods, borrowing through Islamic bonds for infrastructure and Eurobonds for other expenditures. Finally, it recommends pegging the Kenyan shilling to a basket of currencies and hedging prices for major exports.
The document discusses key concepts related to fiscal policy and government budgets in India. It defines fiscal policy as the use of government spending and taxation to influence the economy. It outlines the different types of fiscal policy including expansionary, contractionary, and neutral fiscal policy. It also discusses important budget concepts like revenue budget, capital budget, revenue receipts, revenue expenditure, capital receipts, capital expenditure, budget deficit, fiscal deficit, primary deficit, and public debt. The document emphasizes the need for fiscal discipline and tax reforms in India to address issues like high fiscal and revenue deficits.
The document provides an overview and analysis of the Indian economy based on the Economic Survey 2016-17. Some key points:
1. The survey uses "Big Data" for the first time, analyzing goods and people movement across India from GSTN data.
2. Growth rates in 2016-17 are estimated at 7% overall, with agriculture at 4.1%, industry at 5.2%, and services at 8.8%.
3. Major events of the period include demonetization, GST implementation, setting up of the Monetary Policy Committee, and cleaning bank balance sheets of NPAs.
4. Key economic indicators show declining fiscal deficit, narrowing current account deficit, increasing F
OBJECTIVE
The Corona virus pandemic is posing a severe health and humanitarian crisis across the globe. It has also brought an unexpected economic shock to the global economy and initiated a crisis which would burden nations for years to come. In this Webinar, we shall look at various policy measures being taken in response to the crisis at the national and international levels. The webinar will also highlight possible fiscal measures that can be adopted to respond to the economic crisis caused by COVID-19.
Ahmed, V., Amin, S., Bakhtiar, U., Javed, A. (2021) ‘Government Pension and Fiscal Sustainability in Khyber Pakhtunkhwa,’ Sustainable Energy and Economic Development (SEED) Programme:
Islamabad.
India Budget 2018 ...Changing Landscape - An Analysis by K. C. Mehta & Co.Prashant Kotecha
This document provides an overview and summary of the key aspects of the Indian economy based on the Economic Survey of 2017-18. Some of the main points covered in the 3 sentences are:
1) The Economic Survey analyzed the Indian economy using big data from sources like GST, EPFO, ESIC to provide new perspectives on economic indicators and issues like the gender gap.
2) Key findings included that over 30% of non-agricultural jobs were in the formal sector based on social security enrollment, states' prosperity correlated more strongly with international trade than domestic trade, and the agricultural sector is becoming more feminized.
3) The document also summarizes fiscal trends like tax revenue growth and deficits,
The document provides an overview and outlook for the Indian economy and fiscal year 2018. Some key points:
1. The economic survey for 2016-2017 used big data analytics to gain new insights about the economy, such as estimates of annual work-related migration being double previous census figures.
2. Growth in the first half of FY2017 slowed to 7.2% due to a sharp decline in fixed investment. Inflation moderated as food prices decreased. The external position remains robust.
3. For FY2018, growth is expected to remain in the 6.75-7.5% range. Exports are expected to recover as global growth increases. Private consumption growth is uncertain due to
This document discusses Pakistan's response to and challenges from the COVID-19 pandemic. It notes that Pakistan's economy is projected to contract by 1.5% in 2020 due to lockdown measures affecting jobs and businesses. Pakistan's response has included expanding social safety nets, loans for small businesses, and stimulus for the construction sector. Key challenges include relaxing lockdowns safely, increasing healthcare capacity as cases rise, and ensuring social programs reach all in need. The document argues Pakistan must enhance domestic resource mobilization to finance COVID response and recovery given constraints on foreign aid.
This document summarizes a chapter that examines issues with Pakistan's taxation system and proposes recommendations for tax harmonization across provinces. The chapter identifies a lack of coordination between federal and provincial tax authorities that results in duplicate taxation and increased costs for businesses. It also notes outdated tax bases and rates on services, property, agriculture and other sectors. The chapter recommends creating an oversight agency to enhance cooperation among federal and provincial governments. It also suggests revising taxable services, clearly defining taxation criteria, and establishing a mechanism for modifying tax revenues. The goal is to forge consensus on reforms and have a cohesive taxation framework that supports business growth and governmental objectives.
Effect of vat and tax on economy an analysis in the context of bangladesh.Alexander Decker
This document summarizes a research paper on the effects of taxes and VAT on the economy of Bangladesh. It provides background on VAT and how it has replaced sales taxes in Bangladesh. It discusses the country's current tax policies, including income tax rates that are progressive up to 25% and a uniform 15% VAT rate. It analyzes how the tax system affects people in Bangladesh, noting the heavy reliance on indirect taxes results in a small number of taxpayers shouldering the burden. The narrow tax base and exemptions are also issues. In conclusion, broadening the tax base is desirable but agricultural income exemptions need reconsideration given many affluent people claim agricultural income to avoid taxes.
The document discusses the potential introduction of taxation in the UAE. Due to declining oil prices and increasing fiscal pressures, the UAE government is considering implementing taxes like VAT and CIT to diversify government revenue sources. The IMF recommends a low, broad-based VAT of around 5% and lowering the corporate tax rate from 20% to 10% while expanding its scope. The government is also exploring other options like taxes on vehicles, fees, and reducing energy and water subsidies. Officials say taxes will likely be implemented at low rates to minimize economic impacts, but agreements are still being reached across GCC countries.
Key Discussions about ‘Taxes’ and ‘IBC’ in Economic SurveyTaxmann
#EconomicSurvey Analysis
Download/Read through the Key Discussions about ‘Taxes’ and ‘IBC’ in Economic Survey Below.
Compiled by Taxmann’s Indirect Tax Research & Development Team
Rsm india budget_2018_key_aspects_in_a_nutshellCA.Amit Sharma
The key aspects of the India Budget 2018 document are:
1. GDP growth is projected to be 6.75% in the current fiscal year and rise to 7-7.5% in 2018-19 due to major reforms. Inflation has hit a 6-year low of 3.3% in 2017-18.
2. For companies with revenues up to Rs. 250 crores, the corporate tax rate has been reduced to 25%. No change in personal income tax rates.
3. Exemption on long term capital gains from equity investments is being withdrawn and such gains will be taxed at 10%. Scope of dividend distribution tax has also been expanded.
The document discusses four key functions of public finance: allocation, distribution, stabilization, and growth. It also discusses principles for evaluating a good tax system, including revenue adequacy, stability, simplicity, tax neutrality, economic efficiency, and low administration and compliance costs. The document compares tax systems before and after reforms, noting the need to tailor reforms to a country's existing economic system and administrative capabilities.
The document discusses four key functions of public finance:
1) Allocation - Taxation is used to fund public goods like defense and infrastructure that are unprofitable to produce privately.
2) Redistribution - Redistribution through public expenditures is more effective than the tax system alone at redistributing wealth over time in a way that promotes growth.
3) Stabilization - Tax and spending policies aim to keep the actual income level close to potential to promote full employment and price stability.
4) Growth - The most important objective, policies aim to promote capital accumulation, education, and productivity to boost per capita incomes over time.
The document summarizes new tax regulations and policies in Indonesia in response to the COVID-19 pandemic. President Joko Widodo declared a public health emergency on March 31st and urged social distancing. New regulations include postponing tax filing deadlines, gradually reducing corporate income tax rates for publicly listed companies, implementing VAT on digital services, and allowing banks to restructure loans to help businesses affected by the pandemic. Tax court hearings are also being postponed during the prevention period.
1) The document discusses building a sustainable tax base in Zimbabwe's deflationary economic environment.
2) A sustainable tax system should be fair, simple, equitable, and ensure those who can afford to pay the most taxes do so.
3) Initiatives to build a sustainable tax base include anti-corruption campaigns, automating processes, increasing the number of taxpayers, and supporting industry.
This document provides an overview of macroeconomics and fiscal policy in Pakistan. It discusses key topics such as the objectives, instruments, and types of fiscal policy. It also examines issues like the causes and impact of fiscal deficits, methods of raising government funds, and factors that have contributed to Pakistan's budget shortfalls. The conclusion emphasizes that Pakistan needs structural tax reforms and to increase industrial productivity in order to improve its fiscal position.
This document provides an overview of macroeconomics concepts related to fiscal policy in Pakistan. It discusses key topics like the objectives, instruments, and impact of fiscal policy. It notes that Pakistan is facing budget shortfalls due to high government spending, lower tax revenues, and factors like tax evasion. To avoid increasing fiscal deficits, the document suggests that Pakistan could impose new taxes, increase utility prices, and decrease development spending.
The document discusses Pakistan's fiscal policy. It notes that fiscal policy involves the government using tax revenue and public expenditures to achieve economic objectives like growth and stability. However, Pakistan has faced fiscal deficits in recent years due to high non-development spending on areas like defense and debt interest. This is compounded by a lower tax collection as a result of tax evasion and lower industrial productivity. To improve its fiscal position, Pakistan needs measures like increasing tax rates, broadening the tax base, and reducing non-essential expenditures.
This document provides an overview of taxation in India. It discusses various direct and indirect taxes collected by the central and state governments. Direct taxes include personal income tax, corporate income tax, and capital gains tax. Indirect taxes previously included excise duty, service tax, customs duty, and central sales tax. Recent reforms like GST have subsumed many indirect taxes. The document also explains concepts like tax deductions, tax collected at source, minimum alternate tax, and taxes on gifts, inheritance, wealth, securities transactions, and more.
Credit Suisse Analysis Brasil 2019-2020Edward Lange
- The document discusses Brazil's positive economic outlook for 2019-2020 based on continued recovery, low inflation, and gradual normalization of monetary policy. However, successful fiscal reforms, especially of social security, are needed to stabilize public debt.
- The new administration faces challenges of low growth, deteriorating public finances, and needs to implement productivity and fiscal reforms to put Brazil on a sustainable path. Reforms like tax changes, opening the economy, and education are part of the productivity agenda.
- Risks include a weak social security reform, faster foreign tightening, and weaker China; opportunities include faster reforms to boost growth and asset prices. The fiscal agenda is the main domestic risk over the outlook period.
This document provides an overview and analysis of the Indian economy based on GST implementation. It discusses key points:
1) GST unifies India's tax system, reducing compliance costs and boosting competitiveness. Several reforms including GST, bankruptcy code and bank recapitalization aim to spur growth.
2) An analysis of early GST data shows a large increase in taxpayers, especially small businesses. It also indicates India's internal trade and formal non-farm jobs are larger than estimated.
3) Moving forward, fully implementing GST and other reforms could help India achieve its growth potential if global conditions remain supportive and oil prices stabilize.
CBIZ Commercial Real Estate Quarterly Newsletter – June 2021CBIZ, Inc.
This issue tackles two of the hottest topics for the CRE sector - what you can do to reduce the cost of property insurance and how to take advantage of the newly supercharged employee retention tax credit. Rounding out the issue is coverage of Biden’s tax plan and short takes on Q1 and Q2 CRE sector news. As an added bonus, links are provided to COVID-19 resources, on-demand webinars and additional content & business aids. Learn more.
Fta brazilian taxadvices_for_international_investors Dec 2017Marcelo Couceiro
How doing business in Brazil is a basic summary of tax and corporate aspects international entrepeuners and executives need to understand on their strategic planning phase to enter in Brazil. We recomend as best practice request assistance to experts in order to carry out their business in compliance and adding value to your business.
The Colombian tax system includes national, regional and municipal taxes. The main national taxes are the income tax, the value added tax (VAT), the consumption tax and the debit tax (GMF). Income tax is a levy on revenues realized within the taxable year that have the potential to increase taxpayer’s net equity and are not expressly excluded. The general income tax rate for national companies and permanent establishments is 33% for 2018 and following years. An additional 4% surcharge applies in 2018 for taxpayers with taxable income over approximately USD 275,862. Free trade zone users, excluding commercial users, have an income tax rate of 20%.
Tax Foundation University 2017, Part 5: Details of the Nunes, Cardin, Trump, ...Tax Foundation
This Tax Foundation University Online lecture takes a look at a few major tax reform plans including:
— The Nunes plan to reform business taxation
— Senator Cardin's progressive consumption tax
— The Trump Administration's tax plan
— The House GOP Tax Reform Blueprint
We also discuss these plans in the context of international taxation and teach you a little bit about the Value Added Tax (VAT).
The document provides information on recent tax law developments in Indonesia, including:
1) New debt-to-equity ratio rules that limit interest deductibility for corporate taxpayers to a 4:1 ratio.
2) Proposed omnibus law that aims to simplify business regulations, reduce corporate income tax rates, exempt some dividends, and tax the digital economy.
3) KIB Consulting's involvement in tax discussions with the Indonesian tax authority and business groups on investment issues and solutions.
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
1. TAX FLASH
“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
Global Economy
• Jakarta Flood-
affected Retailers
seek compensation
• Omnibus law & tax
planning
• Updates on VAT
Credit—SE-02/
PJ/2020
• 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-
al Economy
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.
2. COVID-19 Threats to the Global Economy
From carmakers to airlines and hotels, the impact of the outbreak is punishing
firms worldwide
“ The world is a book and those who do not travel read only one page.”
-St. Augustine
Supply Chain
About 17% of Chi-
nese exports are
considered as inter-
mediate goods to
the world.
Tourism
Accounts for 10.4% of
Global Gross Domes-
tic Product (GDP) and
10 % of Global em-
ployment.
International tourist arrivals (overnight visi-
tors) worldwide grew 4% in 2019 to reach
1.5 billion
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
(+2%)
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
2020
3. Jakarta Floor-Affected Seek Compensa on
“I had seen people who had lost everything and everyone they loved to war, famine, and natural disasters.”
-Chelsea Clinton
Background:
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
No. 81/PMK.03/2017
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.
4. 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”
-Khaled Hosseini
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
5. Omnibus Law & Tax Planning
“Real lobbying reform must end the practice of corporate lobbyist writing our laws”
- Marty Meehan
Background:
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
6. Tax Planning
“ “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.
Benefits:
• 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
money.
• 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-
ment.
• 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
7. Omnibus Law
“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
National Economic
Development
Strengthening The
Economy
Investment
Funding
1.Gradual re-
duction in Cor-
porate Income
Tax rates by
22% (2021 &
2022) and 20%
(2023 etc.)
2.Reduction of
Income tax rates
for Go Public
Companies
(general
rates—3%)
3.Elimination of
Income Tax on
Domestic Divi-
dends
4.Adjustment of
Income Tax Arti-
cle 26 Rate on
Interest
Territorial
Tax System
for Offshore
Income
Subject De-
termination
for Personal
Income Tax
Encourage
Tax
Compliance
Promote
Equal Treat-
ment for
Business
Tax Incen-
tive Provi-
sions in Tax-
ation Law
5. Offshore in-
come (including
dividends) is not
subject to in-
come tax as
long as it is
invested in In-
donesia
6. Resident ex-
patriates are
only taxed on
income derived
from Indonesia
7. Indonesian
citizens living for
less than 183
days in Indone-
sia may become
Non-resident
Taxpayers.
8. Expatriates
living for more
than 183 days
in Indonesia
become Resi-
dent Taxpayers
11.Taxation on
Electronic Trans-
actions:
• digital plat-
forms are as-
signed to col-
lect VAT.
• Non-resident
companies
deriving profits
from electronic
transactions in
Indonesia may
be taxed.
12. Rationalization
of Local Taxes:
• Determination
of regional tax
rates that ap-
ply nationally
• Evaluation of
Regional Reg-
ulations on
Local Tax
towards na-
tional fiscal
policy.
13. Relaxed deter-
mination of types
of excisable goods
9. Relaxation of
Input Tax Cred-
iting Rights for
Taxable Entre-
preneurs
10. Re-setting
of:
• Tax, Cus-
toms, and
Excise Ad-
ministrative
Sanctions
• Interest
compensa-
tion
14. Tax Incen-
tives:
• Tax holiday
• Super de-
duction
• Income Tax
Facilities for
Special Eco-
nomic Zones
• Income tax
for govern-
ment securi-
ties
• Regional Tax
Relief/ ex-
emption by
the Heads of
Local Gov-
ernments
Affected Laws: Income Tax, VAT, GPTP, Custom & Excise, PDRD, Local Government
8. 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
Purposes
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.
Objec ve
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
VAT—registered businesses
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)
No. Affirmations
1 VAT input recorded in a certain Masa must be credited with VAT Output in the same Masa
2
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.
3
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.
4
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)
5
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
9. InTalk #1 on reforming the insurance industry - Jiwasraya case
Our Involvement
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.
10. At a meeting forum with Indonesian Steel Industry Association and PT. PLN (Persero)
Our Involvement
11. As a member of Indonesian delegation team at the CYBERTECH GLOBAL
TLV 2020 | Tel Aviv, Israel | Jan 28-30, 2020.
Contact Us
Phone:
(62-21) 2929 5870-73
Bambang B. Suwarso
bambang.suwarso@kib-
consulting.com
Rachmat Kurniawan
rachmat@kib-
consulting.com
Yosefine Amelia
yosefine@kib-
consulting.com
Raden Roro Ratna
Indah Wulandari
wulan@kib-
consulting.com
Addresses:
North Jakarta —144550 Indonesia
The Koppel Building Suite IB.
Jalan Pluit Selatan Raya no. 10
Gold Coast Tower Eiffel Unit N
Pantai Indah Kapuk
www.kib-consulting.com
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.
Promoting Singapore—Indonesia Investment Cooperation (KADIN)
Our Involvement