The government and House of Representatives (DPR) have agreed to apply the refund of value added tax and sales tax o luxury goods to the purchase of domestic goods which would be brought abroad by foreign tourists, Bisnis Indonesia Daily reported on Wednesday.
Speaker of the House’s Ad Hoc Committee for Deliberating Bill on Value Added Tax and Sales Tax on Luxury Goods (RUU PPN and PPnBM) Vera Febyanthy said that the principles of tax refund have been agreed and the limit of purchase deserving the tax refund would be discussed.
According to Vera, the government recommends the limit of the purchase as much as Rp 5 million or the refund value amounting to Rp 500,000, while DPR expects the limit to be lower than Rp 5 million.
“The tax refund is granted as a taxation incentive to drive up the purchase of goods in the country by foreign tourists,” she said, adding that the facility would only be granted to tourists coming out of through airports.
Commenting on the policy, tax observer from Tax Center UI Darussalam said that the policy has been right because value added tax basically constitutes tax on domestic consumption.
“It’s in accordance with elucidation of the value added tax so that value added tax is not imposed when a product is consumed outside the customs area,” he said. (*)