The government has again provided incentives in the tax sector due to COVID-19 pandemic. The government bears 100% employee income tax in the manufacturing sector. This incentive is given for 6 months for employees having a gross income less than Indonesian Rupiah (IDR) 200 million per year.
The employee mentioned is an individual who works for an employer based on a work agreement whether written or unwritten. The individual performs a job in a certain position or activity for a fee that is paid based on a certain period. The employer will determine the completion of work or other provisions.
Here are several points regarding the Government Incentives on Income Tax Article 21 which are explained in article 2 of the Republic of Indonesia Minister of Finance Regulation Number 23/PMK.03/2020:
1. Income Tax Article 21 incentive is given for the tax period of April-September 2020. This incentive is given to employees who meet the following criteria:
- Receiving income from employers with certain Business Field Classifications (KLU) (as many as 440 KLU).
- Provided that the KLU must be listed and reported in the 2018 Annual Tax Return.
- Receiving income from a company that has been designated as an Export Purpose Import Facility Company (KITE) by attaching an attachment to the stipulation as a KITE Company
- Owning a Taxpayer Identification Number
- Receiving regular gross income not more than IDR200 million a year or around IDR16.7 million per month.
2. Income tax borne by the government must be given in cash to employees. The income is not considered as Taxable Income for the employee who receives it.
3. Employers who meet the criteria are required to submit a written notification to the head of the Tax Service Office with a predetermined format (format in attachment C PMK Number 23/PMK.03/2020).
4. The Head of KPP will issue a notification letter to employer who has submitted a written notification but does not meet the criteria within 5 working days.
5. Employers are required to submit a report on the realization of Income Tax Article 21 DTP to the head of the KPP in a predetermined format (format in attachment E PMK Number 23 /PMK.03/2020).
6. The employer is obliged to make a Tax Payment (SSP) or printed Billing Code affixed with a stamp or the words "Income Tax ARTICLE 21 BEARED BY THE GOVERNMENT OF EXPEDITION PMK NUMBER… / PMK.03 / 2020" on the Income Tax Article 21 DTP that is reported.
7. Report on the realization of Income Tax Article 21 DTP, enclosing the SSP or printed Billing Code, is reported no later than:
- July 20, 2020, for the tax period of April - June 2020
- October 20, 2020, for the tax period of July - September 2020
Incentives provided by the government are a form of anticipation for the economic impact of COVID-19 pandemic. The government hopes that this incentive will provide additional income for workers in the manufacturing sector so that workers can maintain their purchasing power.
covid19 , income-tax-article-21 , income-tax-article-21-borne-by-the-government , tax-incentives
