REPUBLIKA.CO.ID, JAKARTA -- Finance Minister Sri Mulyani said that the government has expanded the tax facilities on export services, in the form of zero percent value added tax (PPN). The policy was issued to encourage increased service exports.

"We are adding activities to services export that can get tax facilities in the form of zero percent VAT rates," Mulyani stated at the Bogor Presidential Palace on Wednesday.

She mentioned that the services export could take the form of information technology services, research and development services, legal services, accounting and bookkeeping services as well as audits, interconnection services, transportation equipment, and freight forwarding services for transportation equipment management. According to her, her party is currently finalizing the Minister of Finance Regulation on tax facilities.

"Thus, our potential can have the same facilities as other ASEAN countries," Mulyani noted.

At the beginning of her presentation, Mulyani remarked that the government provided incentives for the business world in the form of "tax allowances," VAT facilities for MSME players, and tax incentives in the mining sector as well as import duties borne by the government.

"Then, we also provide incentives based on regions, such as special economic zones, industrial estates, free trade zones, and stockpiles," she added.

Mulyani acknowledged that President Joko Widodo had asked for various incentives to be evaluated very closely in terms of effectiveness. She explained that for the tax holiday facility, within 6 months from April until now, there have been Rp162 trillion in new investments that have received a tax holiday for nine companies, which will employ eight thousand workers in Indonesia.

The minister noted that of the nine investments, eight were new investments and one was expansion.

"The president asked us to simplify the process and also evaluate the effectiveness of the tax holiday to increase investment," she revealed.

Meanwhile, regarding the decrease in PPh rates for SMEs from 1.0 percent to 0.5 percent, the minister of finance stated that the number of taxpayers is currently increasing. The number of new taxpayers has reached more than 232 thousand SMEs, with a total of Rp5 trillion from 1.5 million SMEs.

According to her, the new PMK draft was being prepared and would be launched soon to support export and investment activities.

"For indirect tax facilities for the upstream oil and gas sector and participating interest transfer and uplift, it is being finalized together with the Ministry of Energy and Mineral Resources," she pointed out.

In her view, the Ministry of Finance will also complete several policies related to foreign exchange proceeds from exports with Bank Indonesia.

"They put their foreign exchange export proceeds from natural resource exports in the form of deposits in the country. The PPh rate is only 10 percent from the previous 15 percent. For three months, the final PPh deposit is 7.5 percent, and for 6 months, IT is more than zero percent," she added.

She further remarked that if converted into rupiah, the incentives will be greater, namely 7.5 percent a month and 5.0 percent three months. Her party immediately completed the draft PMK regarding the use of book values "in the context of merging, consolidation, and expansion of business."

"We will complete it to increase the company's capacity to carry out mergers, acquisitions, and holding establishments," she revealed

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