In 2020, the Government has offered several relieves such as revenue targets and tax facilities. This is because tax revenue plays an important role in supporting counter cyclical fiscal policy, in addition to being the administrator of tax incentives in order to maintain economic stability and National Economic Recovery (State Budget of January 2021).

Based on State Budget Report in January 2021, the achievement of the current tax revenue grew negatively by 19.71 percent (yoy) and the use of tax incentives contributed 22.1 percent to this decline in revenue. The incentives provided in 2020 are in the form of Income Tax Article 21 borne by the government, exemption of Income Tax Article 22 on imports, exemption of import VAT for the needs of COVID-19 pandemic, lowering the corporate income tax rate, reducing the instalment of Income Tax Article 25, Final Income Tax borne by the government for small and medium enterprises, as well as accelerated restitution facilities to maintain taxpayer liquidity. The report also provides information on target achievement of several types of taxes namely Personal Income Tax, Income Tax  Article 21 and Article 26.

The government has decided to extend the tax incentives in 2021, as stated by the Directorate General of Taxes (DGT) through Press Release Number SP-1/2021 on the DGT official website. The press release dated January 15, 2021 informed that the Minister of Finance extended the period of granting tax facilities for two different periods, namely

Until June 30, 2021: income tax facilities for community members who assist the government's efforts in handling COVID-19 outbreak through production, donation, assignment, and provision of assets as regulated in Government Regulation Number 29 of 2020; and

Until December 31, 2021: tax facilities for the procurement of goods and services needed in the context in handling COVID-19 pandemic as regulated in PMK-143/PMK.03/2020.

Director of Counselling, Services and Public Relations of DGT, Hestu Yoga Saksama stated that in addition to vaccines and their raw materials, vaccine supporting equipment will receive tax incentives in 2021. The pharmaceutical industry can might benefit from this incentives after receiving a letter of recommendation from the Ministry of Health which was previously under the authority of the National Disaster Management Agency.

The facilities which are extended until June 30, 2021 include:

1. Additional net income reduction for domestic taxpayers who produce medical devices or household health supplies (PKRT) for the purposes of handling COVID-19 in Indonesia by 30% (thirty percent) of the costs incurred (Article 3 PP Number 29 of 2020) ;
2. Donations that can be a reduction in gross income if given in the context of handling COVID-19 in Indonesia are submitted to BNPB, BPBD, ministries that carry out government affairs in the health sector, ministries that carry out government affairs in the social sector or Organizing Institutions for the Collection of Contributions (Article 4 PP Number 29 of 2020);
3. The imposition of 0% (zero percent) Income Tax rates and is final for additional income received by health workers in the form of honoraria or other compensation (Article 8 PP Number 29 Year 2020);
4. The imposition of 0% (zero percent) Income Tax rates and is final on income in the form of compensation or replacement for the use of assets (Article 9 PP Number 29 of 2020).

The facilities that are extended until December 31, 2021 consist of Income Tax and VAT, which include:

1. Income Tax Facilities

• Income Tax Article 22 and Article 22 Import, on imports and purchases of goods needed in the context of handling COVID-19 carried out by government agencies/ hospitals, and other appointed parties; (Article 5 paragraph (5) PMK Number 143 of 2020);
• Income Tax Article 22, on the purchase of raw materials to produce vaccines or drugs for COVID-19 by the pharmaceutical industry to produce vaccines and/or drugs; (Article 5 paragraph (7) PMK Number 143 of 2020);
• Income Tax Article 22, on sales of vaccines and/or drugs to handle COVID-19 by the pharmaceutical industry for producing vaccines and/or drugs to government agencies and/or certain business entities (Article 5 paragraph (10) PMK 143/2020);
• Income Tax Article 22, on the sale of goods needed in the context of handling the COVID-19 by parties transacting with government agencies, hospitals, and other appointed parties; (Article 5 paragraph (6) PMK Number 143 of 2020);
• Income Tax Article 21, on income received by individual domestic taxpayers as compensation provided by government agencies, hospitals, and other parties appointed for services needed in the context of handling COVID-19 (Article 7 PMK Number 143 of 2020 );
• Income Tax Article 23, on income received by domestic corporate taxpayers and permanent establishments as compensation provided by government agencies/ agencies, hospitals, and other parties for technical, management, or other services required in the context of handling COVID-19 (Article 8 PMK Number 143 of 2020).

2. Value Added Tax Facility

• Government agencies, hospitals, and other parties for the import or acquisition of taxable goods, the acquisition of taxable services, and utilization of taxable services from abroad (Article 2 PMK Number 143 of 2020);
• The pharmaceutical industry for producing vaccines and/or drugs to handle COVID-19 (for import-related tax facilities by the pharmaceutical industry for vaccine production is regulated in PMK-188 / PMK.04 / 2020) (Article 2 of PMK Number 143 of 2020);
• Taxpayers who obtain vaccines to handle COVID-19 from the pharmaceutical industry as referred to in the previous point (Article 2 PMK Number 143 of 2020).

The extension of this tax facility is expected to benefit individual and company, in hope that it would be implemented responsibly.