The government has officially borne a 10% Value Added Tax (VAT) on rental shops or retail outlets (VAT-free shop rentals). This is done in order to encourage the business world to survive the Covid-19 pandemic crisis.
Febrio Kacaribu as Head of the Fiscal Policy Agency of the Ministry of Finance said, the VAT incentives are borne by the government, this room rental of course helps the retail sector, especially retail traders who sell goods and/or services directly to end consumers.
Of course, this incentive is not only given to retail traders in shopping centers but also in people’s markets, shopping complexes, apartments, hotels, educational environments, office environments and public transportation facilities.
The incentives are stated through PMK Number 102/PMK.10/2021 concerning VAT on the Delivery of Room or Building Rental Services to Retailers borne by the government on July 30, 2021.Febrio said this additional incentive is part of the National Economic Recovery Program (PEN) and given for three months from August to October 2021. Febrio hopes that this incentive will be able to provide benefits to retail traders at large considering that the trade sector employs around 25.16 million workers.
Previously, the government had provided various tax incentives for the business world, such as PPh 21 DTP, final PPh MSME DTP, exemption from PPh 22 Imports and reduction in PPh 25 installments. Then also pre-refund of VAT, lowering of Corporate Income Tax rates for all taxpayers, PPN DTP Property and PPnBM. cars so that the total allocation of the 2021 APBN for tax incentives for businesses in the PEN program is Rp 62.83 trillion.
The increase in Covid-19 cases due to the spread of the delta variant apparently made the government respond quickly by stepping on the brakes on tightening restrictions with PPKM level 4. This policy of course had an impact on community activities which decreased in July 2021. Febrio said that the government was aware of the importance of controlling Covid-19 19 to continue to maintain the economic recovery period.
Stepping on the restriction brake is an activity that must be done to prevent the spread of infection. The PPKM level 4 policy is a step that needs to be taken to reduce the potential for transmission of the corona virus so that the pandemic curve can be sloping.
Meanwhile, Coordinating Minister for Economic Affairs Airlangga Hartarto said the government would provide fiscal incentives to businesses as long as PPKM level 4 was implemented. One of them is to bear VAT on rental of shops or outlets in shopping centers or malls for the tax period of June-August 2021.
Budiharjo Iduansjah as General Chairperson of the Association of Retailers and Shopping Center Tenants (Hippindo) said that his party was quite helped by the exemption of the rental VAT. He said the VAT-free shop rental assistance could reduce the burden of renting shops or outlets in shopping centers or malls for the June-August 2021 tax period.
Previously, Director of Extension Services and Public Relations of the Directorate General of Taxes (DJP) Neilmaldrin Noor said this policy was launched to respond to PPKM in the midst of the Covid-19 case. Neil explained that taxable entrepreneurs who provide room or building rental services to retailers are required to make tax invoices and report on the realization of VAT borne by the government. The realization report is made every tax period in accordance with the time of making a tax invoice and submitted online via www.pajak.go.id no later than the end of the following month after the tax period.
If a taxable entrepreneur who renders room or building rental services to retailers does not issue an invoice or submit a report on the realization of VAT borne by the government, it is deemed not to have utilized the government-borne VAT incentive. He said that the incentives were given by the government to maintain the business continuity of the retail trade sector during the Covid-19 pandemic in order to encourage national economic growth.
The government also continues to invite the public to be able to improve compliance with health protocols, because cooperation in controlling the pandemic between the government and the community is the key to boosting economic recovery performance.
The provision of incentives to shop owners or outlets is of course proof of the government’s concern for people who have businesses but are affected by the Covid-19 pandemic, of course the VAT incentives must be accompanied by compliance with health protocols.
Putu Prawira, the author is a contributor to the Press Circle and a Cikini Student