Quick processing of VAT refunds ordered<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad has
\ninstructed the directorate general of taxation to speed up the
\nprocessing of value added tax (VAT) refunds for export-oriented
\ncompanies to help boost exports.<\/p>\n
Mar'ie told a House Budget Commission hearing yesterday the
\ngovernment was still in arrears for the disbursement of VAT
\nrefunds to eligible companies.<\/p>\n
"The refund backlog is quite big," Mar'ie said.<\/p>\n
He refused to say how much the government owed exporters.<\/p>\n
He said the slow processing of VAT refunds was because of the
\ntax office's extreme caution over possible abuse by exporters.<\/p>\n
"It is true that there are unscrupulous exporters who falsify
\ntax invoices to get VAT refunds. However, don't generalize and
\nsay all exporters as bad just because a few of them are
\nunscrupulous," Mar'ie said.<\/p>\n
Exporters are exempt from duties and VAT on materials imported
\nfor the production of export goods. Because they are required to
\npay duties and VAT on materials upon their arrival -- if they are
\nnot processed in a bonded zone -- they are entitled to a refund
\non the duties and VAT which have been paid.<\/p>\n
The tax office is responsible for the VAT refunds and the
\nDirectorate General of Customs and Excise for the duties refunds.<\/p>\n
Companies registered at the Export Service Facilitating Agency
\nget both VAT and duties refunds from the agency.<\/p>\n
The minister instructed the directorate general of taxes to
\ntake legal action against those trying to embezzle state funds
\nthrough VAT refund facilities by falsifying tax invoices.<\/p>\n
"We better take legal actions against those unscrupulous
\nexporters, and against tax officials who collude with them rather
\nthan slowing down the processing of VAT refunds for bonafide
\nexporters," Mar'ie said.<\/p>\n
He said the directorate general of taxes had submitted dozens
\nof fictitious VAT refund cases, worth more than Rp 161 billion,
\nto the Attorney General's Office.<\/p>\n
District courts have handed down verdicts on 51 tax evasion
\ncases worth Rp 150 billion. The verdicts were all in favor of the
\ntax office. But the defendants have appealed to higher courts.<\/p>\n
Tax cases go to court whenever they involve crime, but those
\nnot involving crime usually go to the tax arbitration body in
\nJakarta.<\/p>\n
Mar'ie said many exporters had complained about the slow
\nprocessing of VAT and import duty refunds.<\/p>\n
Some textile exporters, for instance, said they got their
\nrefunds as late as one year after submitting their claims.<\/p>\n
Mar'ie said the slow processing of VAT refunds would affect
\nexporters' cash flows, especially small exporters.<\/p>\n
Speedy VAT refunds would improve exporters' cash flows
\nenabling them to strengthen their working capital or even expand
\ntheir export production capacity.<\/p>\n
Mar'ie told the commission that the government had disbursed
\nRp 2 trillion (US$840 million) in VAT refunds during this fiscal
\nyear's first nine months.<\/p>\n
Of the total VAT refunds this fiscal year, the agency
\ndisbursed only Rp 50 billion, agency chairman Tjoek Soeroso said.<\/p>\n
Tjoek said his agency had also disbursed Rp 50 billion in
\nduties refunds for export-oriented industrial companies.<\/p>\n
About 2,000 exporters are registered with the agency. Their
\nexports account for 35 percent of Indonesia's non-oil exports.<\/p>\n
"We only disbursed Rp 100 billion (during the first nine
\nmonths of this fiscal year) because most of the companies
\nregistered with the agency have got duty and or VAT exemptions
\nfor their imported inputs from the directorate general of taxes,"
\nTjoek said.<\/p>\n
He said companies entitled to duty drawback must provide the
\nagency with guarantees for their duty and VAT exempt imported
\ngoods. The guarantees can be bank guarantee or customs bonds or
\npromissory notes. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/quick-processing-of-vat-refunds-ordered-1447893297",
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"sponsor": "Okusi Associates",
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