Businesses seek extension to tax deadline policy at 12:06 AM

The Indonesian Chamber of Commerce and Industry (Kadin) has requested the government to postpone a deadline to improve tax filing and undertake tax registration until March next year as businessmen are busier than ever coping with the impact of the global economic slowdown.

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Kadin chairman Mohamad Suleman Hidayat said Sunday businesses were expecting the deadline to be extended because the global economic downturn had unexpectedly pushed most businessmen to focus on drawing up counter-measures.

"We have asked the government to delay the deadline for the sunset policy for another three months because of the (economic) crisis," Hidayat told reporters on the sidelines of a Kadin national meeting.

"All businesses are currently thinking of how to handle their own companies (amidst the crisis)."

As a result of a new tax law on general procedure late last year, the government has issued rules requiring all taxpayers to honestly report their taxes and comply with the existing regulations.

Under the new policy, often referred to as a "sunset policy", the government has also given potential taxpayers time to get a tax registration number and start to comply with the regulations.

The government has given one year in which it has waived administrative penalties for previous non-compliance in exchange for accurate tax reporting and registration before starting to impose stiffer sanctions on violators next year.

Taxpayers money is the largest single source of income to the state budget, accounting for about 70 percent of state budget revenue.

According to the directorate general of taxation, Indonesia only has about 6 million taxpayers in a population of 230 million people.

Hidayat argued it was difficult to comply with the sunset policy as it involved lengthy procedures to complete all the filings, including balance sheets.

He suggested the government should issue a regulation-in-lieu-of-law to allow a postponement of the sunset policy.

In response to Kadin's request, Finance Minister Sri Mulyani Indrawati said the government would study how to make that possible.

"Well basically it's impossible for us to extend the registration period as it's already been stipulated in the law," she said.

"What is possible is an administrative loophole that may allow such treatment, and I'll try to look into that," she added.

Mulyani said the sunset policy had been a success as there were around 200,000 requests for tax file number recorded every day at the moment, as the present deadline expired at the end of the year.

The directorate general of taxation has planned stiff measures for those having no tax registration once the sunset period is over, including a new plan to raise overseas travel tax by more than double for those without tax registration numbers.