Indonesia may return tax to companies amid pandemic

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    JAKARTA- Indonesia is considering returning tax paid by companies to support them during the coronavirus pandemic, the country’s deputy finance minister said as the government seeks to retune parts of its economic stimulus.

    Southeast Asia’s largest economy has budgeted 695.2 trillion rupiah ($47.81 billion) for its pandemic response, but some existing tax incentives had not been widely taken up, Suahasil Nazara said in an online interview.

    “We’re thinking of giving a tax cashback. So if a business player has been compliant with its taxes all this time, we will return their 2019 taxes,” Nazara said, declining to comment on whether this could be all or part of a company’s tax payments.

    The government may also scrap a minimum electricity payment for businesses in the pandemic, allowing firms to pay only for power consumed, he said, adding that power company Perusahaan Listrik Negara would get state compensation.

    Government spending and a projected fall in revenue is pressuring Indonesia’s budget, with the 2020 deficit set to be the widest in more than a decade at 6.34 percent of gross domestic product.

    The government has faced criticism for being slow to spend after only using 39 percent of the 2020 budget in the first semester.