Taxation at the COVID-19 Pandemic in Indonesia (English version)

Taxation at the COVID-19 Pandemic in Indonesia

            A recent virus outbreak from China named COVID-19 or Coronavirus has affected people in every continent, across the country. The first case of COVID-19 came from Wuhan, China with an unknown cause of pneumonia as of December 31st, 2019 (World Health Organization, 2020). According to authorities in Wuhan, some patients were operating dealers or vendors in the Huanan Seafood Market. World Health Organization (WHO) announced the first death of COVID-19 patient on January 11th, 2020 followed by its first case outbreak in Thailand on January 13th making it the first case outside of China (World Health Organization, 2020). Meanwhile, the first COVID-19 case recorded in Indonesia was on March 2nd in Jakarta, the numbers rise to 1677 across Indonesia as of April 1st (Badan Nasional Penanggulangan Bencana, 2020). This pandemic has brought devastation to the economy that has affected by it, one of which is Indonesia. COVID-19 has affected Indonesia’s taxation environment as a way to finance a particular nation to enhance the nation’s growth in most aspects. This paper will discuss the COVID-19 pandemic in Indonesia and how government action in terms of Taxation.

            Charles McLure defined tax as a compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures (McLure, 2015). The government has the authority to use the money in order to whether to increase the educational sector, tighten military and national security, enhance the infrastructure, subsidizing healthcare, and many more. However, in a time of the epidemic, the government are working hard to control the taxes so that people can be able to pay taxes or report it since the annual notification letter (SPT) for an individual is due on March 31st.

            Since the COVID-19 pandemic forces people to stay at their home, the government are able to push the tax payment and its reporting to electronic-based, without having to do face-to-face (Yonah, 2020). Reported from DDTC, DJP recently has released 4 relaxations of tax provisions in the middle of the Corona Pandemic (Teaprianga, 2020). The first point was the elimination of administrative sanctions for late reporting of annual tax returns and payment of taxes for individual taxpayers until 30 April 2020. Secondly, the deadline for reporting the realization of the transfer and investment of additional assets from the tax amnesty participant no later than 30 April 2020. Third, taxpayers can submit annual tax returns withholding tax period for the February 2020 tax period on March 21, 2020, to April 30, 2020, without being subject to administrative sanctions for being late. Lastly, the submission of certain legal remedies that have a deadline for submission between 15 March to 30 April 2020 can be extended to 31 May 2020.

            As for business owners that affected by COVID-19, the government has given tax incentives (Pasar Dana, 2020). There are 4 incentives, the four incentives are related to Article 21 Income Tax, Article 22 Import Tax, Article 25 Income Tax, and Value Added Tax (VAT). The new policy will be applied effectively from April 1, 2020. As for Income tax article 21, it will be given to employers from the 440 business field classifications listed in the appendix (attached), and are an Export-Import Destination Facility company (Tempo, 2020). In order to receive the incentives, one must submit a notice of reduction in installments in writing to the Head of the Tax Office where the Taxpayer is registered. All four incentives will be given from April 2020 Tax Period to September 2020 (Pasar Dana, 2020).