Tax exemptions grant taxpayers the right to exclude or deduct a certain amount of tax which would normally have to be paid. Tax exemptions are usually granted by the government of a particular country. Governments may grant tax exemptions to either individuals or organizations in a country. Governments usually give tax exemptions to their citizens for any of several reasons. Such reasons may include boosting the economic performance of a specific area or region as well as reducing or removing the tax burden of particular organizations in the country. Tax exemptions also enable bodies which promote public welfare to do so in a more effective manner. The government of Indonesia offers several different tax exemptions to citizens and organizations which are located there.
Tax Exemptions Which Exist in Indonesia
The government of Indonesia through the Minister of Finance issued a regulation on August 13, 2019, which mainly entailed the exemption of import duty on goods which are to be imported into the country. The exemption of the Value Added Tax (VAT) allowed goods to be imported into the country in a much more affordable manner. However, the imported goods that may receive this tax relief can be moved, re-exported, or even destroyed if not all the requirements are fulfilled. Any imported goods which have obtained facilities can be transferred after two years from the most recent time of issuance of a transfer permit by the customs office and declaration made by the customs import. Such goods may only be re-exported after a customs export declaration has been submitted to the customs office. There is also a possibility that such imported goods might be destroyed. This turn of events would take place after two years elapse after the most recent time that the customs office made a declaration and issued a permit. The only products which are allowed to be destroyed are those which are deemed to be of no value to the economy of Indonesia.
If any imported goods in Indonesia which have obtained the tax exemptions are re-exported, transferred, or destroyed without having fulfilled any of the requirements, there will be import duty, value-added tax, and administrative penalties which will have to be paid.
The government of Indonesia has also established laws that regulate the rates of tax incentives provided for particular businesses. Such businesses receiving these tax exemptions in Indonesia are usually those which offer corporate social responsibility activities to the citizens of Indonesia. Such activities include those performed by individual businesses or corporations which support various important causes, sometimes through foundations.