Tax Relief Stimulus, A Breath of Fresh Air for Farmers

The government issued Finance Minister Regulation (PMK) No. 89/2020 on other values ​​as a basis for taxing agricultural products. Head of the Finance Ministry's Fiscal Policy Agency Febrio Kacaribu said the "other value" refers to the basis for value-added tax (VAT) imposition on agricultural products. "Now farmers can choose to use either another value mechanism or normal mechanism," he said.

Febrio said, by using the "other value" scheme, the government only collects one percent VAT for agricultural products, which is calculated from the normal price. Previously, the applicable VAT reached 10 percent, but it is calculated from the products' selling price. Agricultural products that can use the other value scheme are plantation products, food plants, ornamental and medicinal plants, timber forest products, and non-timber forest products. "Farmers only need to notify the Directorate General of Taxes regarding the use of the other value when submitting the VAT notification (SPT)," said Febrio.