New steps planned to boost tax payment<\/p>\n
JAKARTA (JP): Credit card holders with a billing ceiling of
\nmore than Rp 10 million (US$952) will be required to have a tax
\nidentification number (NPWP) and to file annual income tax
\nreturns, Director General of Taxes Hadi Purnomo said on Tuesday.<\/p>\n
He added that people purchasing cars worth more than Rp 200
\nmillion would also be required to have an NPWP.<\/p>\n
These measures are part of a more intensive tax campaign which
\nwill soon be launched by the government to broaden the tax base,
\nhe said.<\/p>\n
Hadi said that there was still enormous potential to collect a
\nlarger amount of tax from bank time deposits, pointing out that
\nlast year only around Rp 1.5 trillion was collected in
\nwithholding income tax on interest revenues from more than Rp 400
\ntrillion in time deposits.<\/p>\n
\"I am optimistic that with such a vigorous tax effort, the
\n2001 tax revenue target can be achieved,\" he said amid some
\nconcern that the government's recent decision to cancel some of
\nits tax measures would affect the 2001 tax receipt.<\/p>\n
The tax revenue target this year is around Rp 180 trillion, of
\nwhich around Rp 96 trillion will come from income tax.<\/p>\n
But there has been concern that the government may not be able
\nto meet the tax revenue target because of a recent delay in
\ncertain tax policies, including the plan to impose luxury tax on
\nBatam Island and value added tax (VAT) on agricultural products.<\/p>\n
Hadi said that the luxury tax on Batam Island would be delayed
\nfor one year.<\/p>\n
He said that the government would explain to the International
\nMonetary Fund (IMF) its decision to delay the tax policy.<\/p>\n
An IMF mission is expected to start discussing the country's
\neconomic reform program with the government on Wednesday.<\/p>\n
The mission arrived late on Tuesday.<\/p>\n
The government delayed the imposition of the luxury tax due to
\nthe unclear status of Batam; whether it was a bonded zone or a
\nfree trade zone.<\/p>\n
The law to determine the status is still being prepared.<\/p>\n
Batam Island in the Riau archipelago near Singapore was
\ndeclared an industrial-bonded zone by the government in 1978 to
\nattract foreign investment.<\/p>\n
In 1998, the government decided to introduce luxury tax on the
\nisland because, despite its status as an industrial-bonded zone,
\nBatam also has noncommercial inhabitants.<\/p>\n
Massive protests from Batam residents and foreign investors
\nprompted the cancellation of the decision, which was originally
\nto take effect in April last year.<\/p>\n
Hadi said that the delay would not create much effect on the
\n2001 tax revenue target because the luxury tax from Batam Island
\nwas only expected to be around Rp 100 billion.<\/p>\n
But former director general of taxes Machfud Sidik said
\npreviously that the tax loss would be around Rp 300 billion.<\/p>\n
The government also decided to postpone earlier plans to
\nimpose VAT on agricultural products amid protests from farmers
\nand to collect income tax from the central bank. The VAT is
\nfeared to make local agricultural products less competitive in
\nthe international market.<\/p>\n
But the government raised the flat income tax on the interest
\nincome of time deposits to 20 percent late last year from 15
\npercent.<\/p>\n
The decision received strong protest with some bankers warning
\nthat the measure would trigger capital outflow. But the new rate
\nremains effective.<\/p>\n
Minister of Finance Prijadi Praptosuhardjo has said that tax
\nrevenue would play a critical role in the 2001 state budget amid
\nsigns that the budget deficit would be greater than initially
\nprojected due to the weakening of the rupiah and the rising
\ndomestic interest rate.(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-steps-planned-to-boost-tax-payment-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}