Indonesia Advisory

Director General of Taxation Darmin Nasution said that taxable entrepreneurs are permitted to pay their tax liabilities by installments upon utilizing the facility of sunset policy, Bisnis Indonesia Daily reported on Saturday.

“Installment is allowed but the tax liabilities must be paid wholly on December 31 because the program would expire,” said Darmin.

Darmin also said that the termination of the program rather aims at implementing the mandate stipulated in Law Number 28 Year 2007 regarding Taxation General Provision and Procedure.
Sunset policy is a taxation facility governed in the law, which enables individual and corporate taxpayers to rectify income tax returns of 2006 and the previous years. The taxpayers utilizing the facility are exempt from a fine as much as 2% of the total liabilities per month and audit. The facility applies from January 1 to December 1,2008.

However, State Minister for National Development Planning/Head of the National Development Planning Board Paskah Suzetta previously recommended the extension of the program as a compensation for the absence of fiscal stimulus next year.

Paskah said that the extension of the program may be used for driving the real sector amid the ongoing liquidity crisis.

“The policy is deemed effective because the government has decided to provide more stimulus funds for the real sector in the form of government-borne tax,” he said, adding that the provide only could provide stimulus wort Rp 10 trillion next year.