Implementation and Accountability Mechanism of Taxes Borne by the Government in the Context of Covid-19

s Denny Vissaro
s Lenida Ayumi
By Denny Vissaro, Lenida Ayumi
Denny Vissaro
Lenida Ayumi
The Minister of Finance revises the implementation and accountability mechanisms for taxes borne by the government (Ditanggung Pemerintah/DTP) in the context of addressing Covid-19. These changes are outlined in the Minister of Finance Regulation No. 95/PMK.05/2021 concerning Amendments to the Minister of Finance Regulation No. 107/PMK.05/2020 concerning  Implementation and Accountability Mechanisms for Taxes Borne by the Government in the Context of Addressing the Covid-19 Pandemic (MoF Reg. 95/2021).
This regulation has been issued to revise the provisions under MoF Reg. 107/2020 and adjust the granting of DTP tax incentives. On another note, MoF Reg. 95/2021 has been issued to address the Covid-19 pandemic and accelerate national economic recovery. For economic recovery, the government has reallocated subsidy expenditure in the context of providing tax incentives.
MoF Reg. 95/2021 states that subsidy expenditure in the context of providing DTP tax incentives must be administered and managed in an orderly and transparent manner as per statutory provisions. Four articles are revised under this regulation.
First, Article 2 of MoF Reg. 95/2021 outlines the regulation scope of DTP taxes, including the following two things.
  1. DTP tax subsidy expenditure that includes DTP income tax subsidy expenditure, VAT DTP subsidy expenditure, and sales tax on luxury goods (STLGs) DTP subsidy expenditure.
  2. DTP tax revenues which include DTP income tax revenues, VAT DTP revenues, and DTP STLGs revenues.
Second, the amendments to Article 7 of MoF Reg. 95/2021 are outlined in paragraphs (1) and (4). Article 7 paragraph (1) stipulates that the DTP tax subsidy expenditure to address the Covid-19 pandemic and the impact of the Covid-19 pandemic used to accelerate national economic recovery is sourced from the State Budget (Anggaran Pendapatan dan Belanja Negara/APBN).
If so required to allocate expenditure for DTP tax subsidy, budget shifts may be performed. The budget is revised based on statutory provisions on procedures for budget shifts and the implementation of state financial policies to address the Covid-19 pandemic.
Based on the determination of the shifts in budget allocation, the proxy of budget user (Kuasa Pengguna Anggaran/KPA) of DTP tax subsidy submits a proposal for budget revision and/or issuance to the Director General of Budget attached with supporting documents. These supporting documents include the terms of reference (TOR), details of the budget, review results of the government’s internal supervisory apparatus at the technical ministries, and other relevant supporting data.
Next, Article 7 paragraph (4) stipulates that the revision of budget and/or issuance of the budget implementation checklist of the state general treasurer (Daftar Isian Pelaksanaan Anggaran Bendahara Umum Negara/DIPA BUN) refer to the regulations on procedures for budget revision and procedures for planning, reviewing, and determining budget allocations.
Third, the changes contained in Article 8 paragraph (3) of MoF Reg. 95/2021. As per Article 8 paragraph (3), the recapitulation of the DTP tax realization report attached by an official report is prepared based on data from the relevant Directorates at the Directorate General of Taxes.
Fourth, changes found in Article 18 of MoF Reg. 95/2021. This ministerial regulation serves as the accountability for DTP tax revenues and DTP tax expenditure as per the provisions on the granting of tax facilities address Covid-19 and provisions on the granting of support for national economic growth affected by the Covid-19 pandemic.