Government to Waive Tax on Defense Ministry Equipment Imports
- Dispenau
Jakarta – The government thorugh the Finance Ministry has issued regulations regarding exemption from value added tax (VAT) on imports for Defense Ministry.
Ministry of Finance Regulation Number 157 of 2023 regulates VAT exemption for goods and services that are strategic for national defense and security. This regulation will come into effect on January 1, 2024.
Dwi Astuti, Director of Counseling, Services, and Public Relations at the Directorate General of Taxes, Ministry of Finance, explained that as the implementing regulation of Government Regulation (PP) Number 49 of 2022, PMK-157/2023 provides legal certainty and improves the provision of VAT exemption facilities.
Menteri Keuangan Sri Mulyani Indrawati
- VIVA/Anisa Aulia
This is particularly beneficial for taxable goods and taxable services that are strategic for defense and national security purposes.
"With the issuance of this PMK, the Directorate General of Taxes (DJP) seeks to eliminate disputes in the field related to the criteria for the exemption of strategic taxable goods and services for defense and national security purposes," said Astuti in a statement on Thursday.
In PMK-157/2023, criteria for certain taxable goods (BKP) and taxable services (JKP) that are strategic are defined.
These include weapons, ammunition, bulletproof helmets and jackets/vests, special-purpose land vehicles, as well as radar, all of which are comprehensively regulated in Annex I as an integral part of PMK.
Furthermore, services related to providing boundary data, topographic map results, hydrographic map results, and aerial photographs of the territory of the Unitary State of the Republic of Indonesia for defense and security purposes in the Ministry of Defense are also included.
"The VAT exemption facility is granted through the mechanism of a Certificate of Exemption (SKB). Taxpayers can obtain the SKB by meeting compliance requirements and providing complete documentation and information," Astuti explained.
Astuti added that PMK also regulates the authority of the Directorate General of Taxes to oversee the utilization of VAT exemption facilities, which was not previously regulated.
This includes the procedures for replacement and cancellation of SKB, as well as the imposition of sanctions.
"This service is also more easily accessible as it now uses electronic channels. Previously, it was done manually," she remarked.
The issuance of PMK-157/2023 officially revokes the provisions of the Minister of Finance Decree (KMK) Number 370 of 2003 concerning the Implementation of Value Added Tax Exemption on the Import and/or Delivery of Certain Taxable Goods and/or Delivery of Certain Taxable Services Exempted from the Imposition of Value Added Tax.
