Sri Mulyani Cuts Value-Added Tax for Service Sectors



Mahinda Arkiyasa

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  • TEMPO.CO, JakartaFinance Minister Sri Mulyani Indrawati has slashed value-added tax (PPN) for several categories of service sectors in a bid to boost the development of modern service, and to improve competitiveness and national trade balance.

    The Finance Ministry's Tax Directorate-General announced the reduction in a press release received dated April 4, 2019. The zero percent value-added tax for services export is regulated in Ministerial Decree (PMK) No. 32/PMK.010/2019 that has been enforced starting on March 29, 2019.

    The services export must meet two formal conditions to obtain the zero percent incentive, namely a written agreement and payment document with a valid proof of payment from the export recipient to the taxable businessman. Failure to fulfill the conditions, the government will impose 10 percent tax to services rendered.

    The zero percent VAT is valid for makloon service (a third party providing customized services, usually on clothing and garments), repair and maintenance service, transportation service for goods export, construction services, information and technology service, research and development, transportation equipment rental, and consultancy services as well as trade services.