Five Labor-Intensive Industries to Enjoy Tax Relief

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  • TEMPO.CO, Jakarta - The Finance Ministry will soon ratify the regulations in tax postponement and tax payment relief for labor-intensive industries. “They’re already at the stage of finalization, hopefully it will be done today,” Finance Deputy Minister Mahendra Siregar said yesterday, Tuesday, August 27, 2013.

    On Monday, Mahendra said, Finance Minister Chatib Basri consulted the House’s Finance Commission to pinpoint the industries receiving the tax relief. “It’s been agreed, five labor-intensive industries would enjoy the tax relief: textile, garment, footwear, toy, and furniture,” he said.

    The tax relief for the five industries includes the postponement of income tax payment of 25 percent each month and up to 50 percent for export-oriented industries. The second incentive is postponement of tax payment until April next year.

    “Both incentives are aimed at securing corporate cash flows,” he explained. The government hope the issuance of these regulations will help companies avoid dismissals.

    Tax Directorate General spokesperson Kismantoro Petrus said these incentives would also help businessmen pay their taxes. He added the incentives were not only targeting major industries, but also small and middle ones, such as the furniture industry in Jepara.

    “After the regulations are ratified, businessmen can pay their income taxes by installment in a longer term,” he said.

    Kismantoro explained the regulations were temporary and would take effect until 2014 to help companies safeguard their cash flows. Tax payments, he added, will return to normal once the companies’ financial states recovered.