Law on Harmonization of Tax Regulations Used to Address COVID-19 Disruptions, Minister Says

Photo caption: Minister of Finance Sri Mulyani delivers press statement after joining a plenary cabinet meeting, at the Presidential Office, Jakarta, Monday (17/11). (Photo by: PR/Agung)

The Law on Harmonization of Tax Regulations (UU HPP) serves as a guidance for the Government to address COVID-19 disruptions, according to Minister of Finance Sri Mulyani Indrawati.

“Tax is the main and fundamental instrument in managing a state and the economy. Therefore, tax as an instrument must be drawn up, imposed, and well managed,” the Minister said during the Kick off of UU HPP Dissemination, Friday (19/11).

She explained that the Government uses the State Budget (APBN) as an instrument to make the economy more robust, be it in terms of tax, customs and excise, non-tax revenue (PNBP), expenditure, or financing.

“In terms of tax, it must have multidimensional functions. Tax is a source of state income for robust APBN and economy. On the other hand, tax should also provide incentives. Thus, tax has complex dimension. It must collect revenues and must be responsive to economic needs at the same time,” she said.

The UU HPP will also improve taxation system in Indonesia and help build good governance, fairness, and legal certainty. The Minister said that the Law will improve voluntary compliance of taxpayers.

“We expect taxation system to be more efficient, neutral, flexible, effective, and fair which provides certainty and simplification to the economy and taxpayers, as well as provides predictability and stability,” she added.

On that occasion, the Minister appreciated support from all sides that speed up the process in drawing up the Law.

“We have solid consultation and cooperation with the House of Representatives to discuss the UU HPP including the implications for the people and measures to give responsive, flexible, and accountable response,” she said adding that the Law is expected to bring fairness and partiality to all Indonesians.

The Law on Harmonization of Tax Regulations, she added, should help the weak and provide [payment] relief. It also provides simplified and efficient process to improve compliance of taxpayers.

For the record, the UU HPP consists of nine chapters that regulate six sections covering general provisions and tax procedures (KUP), income tax (PPh), value-added tax (VAT), taxpayer voluntary disclosure program (PPS), carbon tax, and excise. (MINISTRY OF FINANCE PR/UN) (RAS/MMB)