Repayment Limit Relaxed: Refunds Deflate Tax Target

The easing of provisions for tax restitution or refunds is enshrined in Minister of Finance Regulation (PMK) No. 209/PMK.03/2021 concerning the second amendment to PMK No. 39/PMK.03/2018 concerning Procedures for Preliminary Refund of Excess Tax Payments.

In this regulation, the government adjusts the limit for overpayment of Value Added Tax (PPN) refunds for Taxable Entrepreneurs (PKP) who meet certain requirements as taxpayers to Rp5 billion. This limit figure is much higher than the previous provision which was only Rp. 1 billion. This condition opens the opportunity for more taxpayers who are included in the PKP to apply for tax refunds or refunds. This policy also risks depleting potential tax revenues, which this year is targeted to reach Rp1,265 trillion as stated in the 2022 State Revenue and Expenditure Budget (APBN). A member of the Indonesian Chamber of Commerce and Industry (Kadin) for Monetary Policy and Financial Services, Ajib Hamdani said, the restitution policy increases the government's fiscal risk because the reduction in tax revenue has the potential to be even greater. "This restitution will be a direct deduction from existing tax revenues," he told Bisnis last weekend. According to him, without any easing of regulations, the potential for an increase in restitution this year is quite large in line with the need for fiscal assistance to the public and the business world to maintain the momentum of economic recovery.

|•SOURCE•| Articles :BISNIS | Image :KAGANGA |

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