The Indonesian Forwarders’ Association (INFA), Indonesian Express Delivery Companies’ Association and seven other associations of service-providing companies have rejected Indonesia’s new income tax policy, which became effective on January 1.
Asperindo chairman Johari Zein said the new income tax regulation is not improving the industry as it adds more burdens to members.
"The problem is that courier companies can spend more on administrative procedures, and even can lead to double payment at the end of the year," Zein said.
The new regulation No. 178/2006 stipulates that all service users, including users of courier services, must collect 3 percent of total charge levied upon them by service provider. "We reject it because it will not bring this industry forward, but backward," Zein said.
Similarly, INFA vice chairman, Iskandar Zulkarnaen in a recent meeting of nine associations aimed to annul the regulation, said the new withholding tax is against other government policies. "It’s against Indonesia’s tax system which holds the principle of self-assessment," Zulkarnaen said. The new regulation is also against Presidential Decree No.3/2006 that endorses new policies on improving the investment climate.
The decree upholds dialog with companies for any policy tightly connected with investment in Indonesia. "But we don’t see dialogue in the new policy, neither there is socialisation by the excise directorate," he emphasised.
The new policy also neglects Law 17/2000, particularly article 23, which stipulates that the excise, in order to determine the net income, must make use of a company’s internal data and information, not by baseless estimations. Zulkarnaen was also worried of negative impacts that the new regulation can cause on forwarding industry in the country.
"If we don’t act against it now, I am afraid it will gradually kill the logistics and transportation sector, as well as other service sectors," he said.
Responding to the appeal of the associations the directorate of excise has formed a committee to re-study the regulation. In the last meeting with representatives of Indonesian Chamber of Commerce and Industry (Kadin) and several service providers’ associations, the representative of excise directorate promised to the associations for a solution by the end of March.
¨C Siktus Harson
