The Directorate General of Taxes (DGT) provides tax relief to taxpayers that reside, domicile, and/or whose places of business activities are in South Kalimantan and West Sulawesi Provinces.

The tax relief is outlined in the Director General of Taxes Decree No. KEP-27/PJ/2021 concerning Taxation Policies in Connection with Natural Disasters in South Kalimantan and West Sulawesi Provinces (KEP-27/2021). Tax relief is provided in connection with natural disasters in South Kalimantan and West Sulawesi Provinces.

The Regional Government of South Kalimantan has also set forth the emergency response status for floods, landslides, tornadoes, and tidal waves in South Kalimantan Province. The emergency response status for the disasters has been set forth since 14 January 2021 based on the Governor of South Kalimantan Statement Letter No. 360/038/BPBD/2021.

Similarly, the West Sulawesi Regional Government has declared an emergency response status for earthquakes in West Sulawesi Province. The emergency response status was stipulated from 15 January 2021 to 28 January 2021 based on the Governor of West Sulawesi Decree No. 001/Darurat-SB/1/2021.

With regard to natural disasters in the two regions, the Director General of Taxes, through KEP-27/2021, has decided to provide tax relief. This tax relief is provided to ease the burden and socio-economic impact on taxpayers affected by the disasters.

Through KEP-27/2021, the Director General of Taxes also stipulates the situation resulting from the natural disasters of floods, landslides, tornadoes, and tidal waves in South Kalimantan Province and earthquakes in West Sulawesi Province as force majeure. Moreover, KEP-27/2021 outlines two forms of tax relief to be provided.

First, the elimination of tax administrative penalties for late filing of Periodic Tax Returns and tax payments and/or remittance and/or tax liability. As for taxpayers in South Kalimantan, penalties are eliminated for the late filing of Periodic Tax Returns and tax payment and/or remittance and/or tax liability due on 14 January 2021 to 31 January 2021. Periodic Tax Returns and the payment and/or remittance should be performed no later than 28 February 2021.

For taxpayers in West Sulawesi, on the other hand, penalties are eliminated for the late filing of Periodic Tax Returns and tax payment and/or remittance and/or tax liability due on 14 January 2021 to 28 February 2021. Taxpayers in West Sulawesi may file Periodic Tax Returns and perform payment and/or remittance no later than 30 April 2021.

For this delay, the taxpayers will not be subject to administrative penalties in the form of fines or interest. The administrative penalties are eliminated by non-issuance of Notices of Tax Collection (Surat Tagihan Pajak/STP). However, in the event that STP has been issued, the Head of the Regional Office (Kantor Wilayah/Kanwil) of the DGT eliminates the administrative penalties ex-officio.

Second, the extension of the deadline for submitting legal remedies. Such legal remedies include: (i) objections; (ii) submission of the second application for reduction/elimination of administrative penalties; or (iii) the second reduction/cancellation of notices of tax assessment or STP.

The extension of the deadline for submission of legal remedies is granted to taxpayers in South Kalimantan whose deadline for submitting applications ends from 14 January 2021 to 31 January 2021. The extension of the deadline for submitting such applications is given until 28 February 2021.

For taxpayers in West Sulawesi, on the other hand, an extension is granted for applications of which the submission deadline ends from 14 January 2021 to 28 February 2021. The extension of the deadline for such applications is given until 30 April 2021.

The twelfth dictum of the regulation emphasizes that the Head of the Regional Office of the DGT on behalf of the Director General of Taxes may grant an elimination of administrative penalties and an extension of the deadline for the submission of legal remedies in the event of a natural disaster in his working area.

Both reliefs are granted considering the level of emergency or disaster in each region based on the decision of the regional head or competent official in the context of disaster management. The Director General Decree has taken effect as of 5 February 2021.

Tax Relief in Connection with Natural Disasters in South Kalimantan and West Sulawesi