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.

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. 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. 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. 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. “Liberty, when it begins to take root, is a plant of rapid growth."
- George Washington

6. “Growth is never by a mere chance, it is the result of forces working together."
- James Cash Penney

7. “The line between disorder and order lies in logistics."
- Sun Tzu

8. “Voters want conflicting things. They want a lot of government spending, but they don’t
want higher taxes." - Bruce Rauner

9. “The internet is becoming the town square for the global village of tomorrow."
- Bill Gates

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. “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. “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. 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. 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. 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. 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. 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
Address:
The Koppel Building
Suite IB.
Jalan Pluit Selatan
Raya no. 10
Jakarta Utara– 144550
Indonesia
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.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