Jakarta – The Indonesian government is preparing a regulation to relax the value added tax (VAT) refund requirements for foreign tourists to support efforts to achieve this year's target to attract 20 million tourist arrivals.
"We have prepared a foreign ministerial regulation," said Finance Ministry Taxation Director General Robert Pakpahan in Jakarta on Tuesday, adding that the new policy was expected to help small and medium enterprises to boost sales among foreign tourists.
Under the current regulation, a tourist is entitled to a VAT refund if they spend at least Rp 500,000 (US$35.59) at one shop on the same date and on one receipt. Under the planned regulation, a tourist will be entitled to a refund of 10 percent of the value added tax (VAT) paid on spending of more than Rp 500,000 during their stay in Indonesia.
"With the new regulation, tourists will be able to refund the VAT for a minimum spending of Rp 500,000 on different receipts from different shops and on different dates," Robert said.
He said the Finance Ministry was still discussing the draft regulation and that it was expected to be completed in one month. It will be a revision of Finance Ministerial Regulation (PMK) No 76/PMK.03/2010 on the VAT refund procedure for foreigners.
Indonesian Employers Association (Apindo) chairman Hariyadi Sukamdani welcomed the proposed relaxation of the VAT refund requirements and expressed hope it would benefit retailers through increasing the number of tourist arrivals.
"What we want is for tourists to get forms for refunding their VAT at each retail outlet," he added as quoted by kontan.co.id. (bbn)