Government Postpones, Revokes and Reduces Several Tax Tariffs

TEMPO Interactive, Jakarta:The Indonesian government has decided to postpone, revoke and reduce tax tariffs on 45 types of goods in order to stimulate the real sector and the economy. This was announced by the Director-General of Taxes Hadi Purnomo at the Directorate General of Taxes office in Jakarta on Thursday (9/1). As reported earlier, the government has decided to give tax relief to businessmen in Indonesia, including the postponement of VAT on six strategic goods. The government will also revoke the Luxury Goods Sales Tax (PPnBM) on 23 items including cellular phones, wireless phones, TVs of up to 21 inches, washing machines with a capacity of up to six kilograms, refrigerators with a capacity up to 180 liters and air conditioners. The government will also reduce PPnBM on eight other goods. Because of these new policies, according to Purnomo, the tax sector will lose some Rp6 trillion in revenue. However, he said he was optimistic that his office would reach the revenue target of Rp213.80 trillion in 2003. Purnomo said he considered tax revenue would increase as taxpayers would be more open in fulfilling their obligations and fill in their tax report properly. The postponement of VAT levy will apply to toll roads, electricity for industry, homes with an electrical supply of between 2,200 and 2,600 watts, raw materials for animal feed, animal feed and capital goods. PPnBM will not be imposed on packaged tea, lenses, mirror prisms and other optical elements, eating and kitchen equipment, make-up equipment and sanitary goods made from iron or steel. The government will also decrease the PPnBM on nine items such as VCR, VCD and DVD players, as well as tape cassettes costing over Rp1 million and TVs of above 21-inches. The government will also reduce Income Tax on traders in the agricultural, forestry, plantation and fishery sectors from 1.5 percent to 0.5 percent. (Dara Meutia Uning --- Tempo News Room)