A tax office branch in Kupang, East Nusa Tenggara reopens for service last Tuesday. (Antara Photo/Kornelis Kaha)

Your Covid-19 Donations Now Tax Deductible


JUNE 21, 2020

Jakarta. The government has granted tax cuts and incentives to individuals or companies involving in the national efforts of Covid-19 pandemic mitigation from March to September, in an attempt to mobilize the country's resources to curb the pandemic, the tax office said in a statement. 

"The Directorate General of Taxes urged the public to take part in a joint effort to bring the Covid-19 outbreak," Hestu Yoga Saksama, the tax office's spokesman, said in the statement over the weekend. 

"The participation of taxpayers in producing medical devices, or making donations in the form of money, goods, or services will greatly assist health workers, patients, families, and all the people of Indonesia in facing the Covid-19 outbreak," Hestu said. 

President Joko "Jokowi" Widodo signed into effective government regulation about the Income Tax Facilities Regarding the Covid-19 Pandemic on June 10.

The facilities include tax cuts for medical devices and household health supplies makers. 

Any firm that produces included surgical masks and respirators of N95 type, personal protective clothing, surgical gloves, examination gloves, ventilators, or reagent for diagnostic tests for Covid-19 could mark down its net income by 30 percent, Hestu said. That, in turn, would reduce the amount of income tax that the company needs to pay to the government. 

The second facility was for companies or individuals making donations to the National Disaster Management Agency (BNPB), the Regional Disaster Management Agency, the Health Ministry, the Social Affairs Ministry, or other institutions that government allow collecting the Covid-19 donations. Those taxpayers could deduct their contributions from their income tax bill, Hestu said. 

Third, doctors and nurses, and other health workers, including ambulance drivers, administrative staff, corpse screening workers, and health students, would receive their salary or honorarium tax-free. 

 Also, taxpayers who lease land, buildings, or other assets to the government for Covid-19 mitigation would pay no taxes on the rent income they made. 

Lastly, publicly listed companies that buy back their shares between March to September, would be considered eligible for paying income taxes at a lower rate. 

"All of the above facilities can be used for activities carried out from March 1 to Sep 30 and, except for share repurchases, can be extended as needed," Hestu said. 

He said taxpayers would still need to submit an online report to the tax office if they decided to use the facilities.