INCOME TAX INCENTIVE ONLY FOR CRISIS-RIDDEN COMPANIES

Jakarta, Jan 30 (ANTARA) - The director general of taxation, Darmin Nasution, said here on Thursday that the personal income tax incentive would only be given to companies affected by the current global crisis.

"We cannot as yet announce it thoroughly as we cannot decide its extension by ourselves but must coordinate with the office of the coordinating minister for the economy, the ministries concerned and the business sector. Efforts must be made to prevent the ineligibles to enjoy it," he said.
He admitted that no decision had been made regarding the sectors that would enjoy the cut in personal income tax (the PPh Article 21).
"The program meanwhile will only work if sectors to enjoy it are already determined," he said.
He said companies usually quoted the PPh from employees whose income surpassed untaxed income limits.
Some companies have been facing difficulties as a result of current global crisis but some others have been in the situation for a long time and therefore distinction had to be made between them so that only those suffering from the current crisis would enjoy the incentive, he said.
"Those who are hit by the crisis may not pay the tax but we also want to assure that it is the employees not the companies that will enjoy it, he said adding that some companies might claim that they had so far paid the income tax of their employees.
In view of that he said he would ask companies whose employees receiving the incentive to report their employees' gross wage. "That way companies under the category need not quote it so that the incentive could be enjoyed by the employees," he said.
Regarding the corporate income tax (PPh Article 25) incentive Darmin said it was different from the personnel income tax incentive.
He said the corporate income tax incentive had been regulated in the new income tax law namely that it would be cut from currently 30 percent to 28 percent.
"Then in case of a company's profit dropping up to 20 percent the company concerned may just report reducing its tax payment to help its liquidity," he said.
He said based on the old regulation companies had to wait for three months and applied for it. "In the current facility they do not have to wait for three months for it," he said.
He said his office would check on the track records of companies that received the incentive. "If the companies are delinquent we will explain their tax problem," he said.