Missing taxes from these 2 sectors are not only due to misinvoicing

Jakarta, DDTCNews – The potential loss of state revenue from the fisheries and coal sectors is seen not only due to practice misinvoicing export and import.

Research conducted by The PRAKARSA trying to quantify impact under-invoicing exports and imports to transactional tax and PNBP revenues such as VAT, Article 22 Import Income Tax, and royalties.

"Actually there are several other schemes that are commonly used to avoid taxes besides misinvoicing,” said Manager of DDTC Fiscal and Research and Advisory Deny Vissaro, Tuesday (31/1/2023).

As an example continued by Denny, fixing the price of a transaction within a certain range is to reduce the tax burden to a minimum so as to maximize the profits of the corporate group.

Thus, the loss of state revenue does not only arise from under-invoicing, but it can be from manipulating the price of import transactions in order to reduce profits recorded domestically. With lower profits, the Corporate Income Tax that must be paid is also smaller.

Denny said the tax avoidance scheme would continue to change along with developments in regulations set by the government. For this reason, every loophole needs to be closed immediately through various anti-tax evasion instruments.

Indonesia through Government Regulation (PP) 55/2022 actually already has instruments to prevent tax evasion based on the principle substance over form.

Referring to Article 32 paragraph (4) PP 55/2022, the Directorate General of Taxes (DGT) can redefine the amount of tax payable based on the principle substance over form when specific instruments cannot prevent tax evasion.

Denny explained that the anti-tax evasion instrument uses principles substance over form will be capital to minimize loss of tax revenue in the future.

Despite the limitations of the study conducted, he assesses that the fisheries and coal sectors are still undertaxed (undertaxed). The tax contribution from the fisheries and coal sectors to taxes is relatively low compared to the contribution to GDP.

"The redistribution of the tax burden between sectors needs to be carried out not only for the purpose of optimizing revenues, but also for maintaining fiscal resilience," he said.

For your information, The PRAKARSA  estimate the lost state revenue misinvoicing in the fisheries and coal sectors in 2012 to 2021 it will reach IDR 74 trillion.

Lost state revenue as a result misinvoicing in the fishery sector it is estimated at IDR 2,7 trillion in 10 years, while in the coal sector it reaches IDR 71,4 trillion. (rigs)

Sumber: DDTC News

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