Ongoing Advocacy on Withholding Tax in the Logistics Sector
The Government’s Working Group IV facilitated a policy meeting on Thursday 03 August 2017 between EuroCham Transport and Logistics Working Group with Directorate General of Tax. The meeting was chaired by Mr. Carlo B. Tewu (Executive Deputy, Field Coordination of National Order and Security of the Coordinating Ministry for Politics, Law, and Security) and the Directorate General of Tax was represented by Ms. Ety Rahmawati (Implementer of the Directorate of Tax Regulation II), accompanied with other officials.
The topic discussed was about the proposal to remove freight forwarding, logistics and other transportation related services from the Minister of Finance Regulation No. 141/2015 which imposes a withholding tax of 2% on transportation and logistics services. Evidence that the tax has been withheld has to be issued for every transaction through a Withholding Tax Certificate. As logistics and freight forwarding business involves a vast amount of transactions every day and often with a negligible amount of withholding tax, the number of Withholding Tax Certificate that has to produce reaches several thousand per month, with no additional revenue benefit for the State.
Another topic discussed was the implementation of DG Tax Regulation No. PER-16/PJ/2014 on Electronic Tax Invoice. This regulation obligates for every commercial invoice that a company issues, a duplicate tax invoice has to be issued to the Directorate General of Tax. This duplicate administrative procedure can be simplified as all the necessary information for tax collection purposes can be found in the commercial invoice. Based on this meeting the Directorate General of Tax agreed to continue the discussion with the Fiscal Policy Agency and the Directorate of Tax Regulation I.