Tax Facilities through Omnibus Law Taxation: A Canon Taxation Review

Main Article Content

Fidiana Fidiana

Abstract

This research is a conceptual study to examine tax policy in the pandemic situation with a canon taxation perspective, namely equity, certainty, convenience, and efficiency. The study conducted by using a literature review concerning the role of Omnibus Law includes tax facilities to attract foreign investment underlining strengths and weaknesses. Data is obtained through secondary sources in the form of archival reports and previous research relevant to the research. Based on the analysis of literature studies, this research produces several things. First, the principle of equity is found in adjusting corporate tax rates. Associated with the aim of attracting foreign investment, the tariff adjustment policy naturally will not be realized in 2020, where traffic between countries is restricted to prevent the spread of Covid-19. Second, in the tax policy scheme of domestic tax subject reclassification, which includes more than 183 foreigners working in Indonesia, and Indonesian citizens living abroad over 183 days are classified as subject to foreign tax. Tax is imposed on foreigners only on income earned in Indonesia. This pattern fulfills certainty principles. Third, the regional tax incentive scheme is an instrument that ensures the certainty of regional investment in line with the principles of equity and convenience. Furthermore, local tax exemptions can lower the price of consumer goods in the regions, thereby increasing the purchasing power of the wider community, which was hampered by the pandemic. In this way, local taxes play a role in increasing regional competitiveness through public policies (tax incentives), to improve the welfare of people, especially those affected by the epidemic. Fourth, the tax holiday scheme encourages industrial growth in accordance with the principle of efficiency.

Downloads

Download data is not yet available.

Article Details

How to Cite
FIDIANA, Fidiana. Tax Facilities through Omnibus Law Taxation: A Canon Taxation Review. Policy & Governance Review, [S.l.], v. 5, n. 3, p. 195-205, aug. 2021. ISSN 2580-4820. Available at: <https://journal.iapa.or.id/pgr/article/view/373>. Date accessed: 25 sep. 2021. doi: https://doi.org/10.30589/pgr.v5i3.373.
Section
Articles

References

Aničić, J., Jelić, M., & Đurović, J. M. (2016). Local Tax Policy in the Function of Development of Municipalities in Serbia. Procedia - Social and Behavioral Sciences, 221, 262–269. https:// doi.org/10.1016/j.sbspro.2016.05.114

Boly, A., Coulibaly, S., & Kéré, E. N. (2019). Tax Policy, Foreign Direct Investment and Spillover Effects (310). https://www.afdb. org/en/documents/publications/ working- paper-series/

Carnaghan, C., Downer, P., Klassen, K., & Pittman, J. (2004). E-Commerce and Tax Planning: Canadian Experiences. Canadian Accounting Perspectives, 3(2), 261–287. https://doi. org/10.1506/V82X-X152-PND1-ABHE

Cnossen, S. (2015). What Kind of Corporation Tax Regime? Sijbren Cnossen. Osgoode Hall Law Journal, 52(2), 513–551.

Darussalam, D., Kristiaji, B. B., & Yustisia, D. (2019). Prospek Pajak Warisan di Indonesia (DDTC Working Paper 2019; DDTC Working Paper 2019). https://ddtc.co.id/id/riset/ publikasi/working-paper/prospek-pajak- warisan-di-indonesia/#.Xo_XUP0zbIU

Daude, C., Gutierrez, H., & Melguizo, A. (2017). Doctoring the ball: The political economy of tax incentives for investment in the Dominican Republic. Journal of Economic Studies , 44 (1), 2–23. https://doi. org/10.1108/JES-05-2015-0090

Directorate General of Taxes, D. (2020a). Direktorat Jenderal Pajak Tanggap COVID-19. Direktorat Jenderal Pajak, DJP. https://www.pajak. go.id/covid19

Directorate General of Taxes, D. (2020b). Jaga Ekonomi Indonesia, Pemerintah Berharap Omnibus Law Perpajakan dapat Segera Diundangkan. Direktorat Jenderal Pajak, DJP. https://www.pajak.go.id/id/siaran- pers/jaga-ekonomi-indonesia-pemerintah- berharap-omnibus-law-perpajakan-dapat- segera

Enache, C., Asen, E., & Bunn, D. (2020). Tracking Economic Relief Plans Around the World during the Coronavirus Outbreak. Tax Foundation. https://taxfoundation. org/coronavirus-country-by-country- responses/

Febriana, R. (2018). Studi Kepustakaan dalam Disiplin Ilmu Akuntansi. In Metode Penelitian (pp. 92–107). Universitas Gunadarma.

Fletcher, K. (2002). Tax Incentives in Cambodia, Lao PDR, and Vietnam. IMF Conference on Foreign Direct Investment: Opportunities and Challenges for Cambodia, Lao PDR and Vietnam. https://www.imf.org/external/ pubs/ft/seminar/2002/fdi/ eng/pdf/ fletcher.pdf

Fugaru, A. (2015). The Fiscal Tradition in Europa – A Hindrance to Achieving the Fiscal Union? Procedia Economics and Finance, 22, 412–421. https://doi.org/10.1016/S2212-5671(15)00317-2

Hadari, Y. (1990). The Role of Tax Incentives in Attracting Foreign Investments in Selected Developing Countries and the Desirable Policy. The International Lawyer, 24(1).

Harefa, M. (2016). Efektivitas Pemungutan Pajak PBB P2 Oleh Pemerintah Kota Makasar dan Sumbangannya Terhadap Pendapatan Daerah. Jurnal Ekonomi Dan Kebijakan Publik, 7(1), 67. https://doi.org/10.22212/ jekp.v7i1.414

Harris, P. (2013). Corporate Tax Law. Cambridge University Press. https://doi.org/10.1017/ CBO9781139519922

Kabinga, M. (2016). Principles of Taxation. Tax Justice & Poverty.

Kalaš, B., Mirović, V., & Milenković, N. (2018). The Relationship between Taxes and Economic Growth: Evidence from Serbia and Croatia. The European Journal of Applied Economics, 15(2), 17–28. https://doi.org/10.5937/ EJAE15-18056

KPMG, K. (2020). Germany: Tax relief measures in response to coronavirus (COVID-19). KPMG. https://home.kpmg/us/en/home/ insights/2020/03/tnf-germany-tax-relief- response-coronavirus.html

Kristiaji, B. B. (2020). Pandemi Covid-19 dan 9 Prediksi Pajak di Masa Mendatang. DDTCNews. https://news.ddtc.co.id/ pandemi-covid-19-dan-9-prediksi-pajak- di-masa-mendatang-20415?page_y=600

Lapatinas, A., Kyriakou, A., & Garas, A. (2019). Taxation and economic sophistication: Evidence from OECD countries. PLOS ONE, 14(3), e0213498. https://doi.org/10.1371/ journal.pone.0213498

Li, Quan. (2006). Democracy, Autocracy, and Tax Incentives to Foreign Direct Investors: A Cross-National Analysis. The Journal of Politics, 68(1), 62–74. https://doi. org/10.1111/j.1468-2508.2006.00370.x

Li, Qun. (2008). Tax Incentive Policies for Foreign- Invested Enterprises in China and theirInfluence on Foreign Investment. Revenue Law Journal, 18(1).

Madiès, T., & Dethier, J.-J. (2012). Fiscal Competition in Developing Countries: a Survey of the Theoretical and Empirical Literature. Journal of International Commerce, Economics and Policy, 03(02), https://doi.org/10.1142/ S1793993312500135

Megersa, K. (2019). Review of tax incentives and their impacts in Asia.

Moleong, L. (2014). Metode Penelitian Kualitatif (Edisi Revi).

Morisset, J. (2003). Tax Incentives : Using Tax Incentives to Attract Foreign Direct Investment. Viewpoint: Public Policy for the Private Sector, 253. https://openknowledge. worldbank.org/handle/10986/11325

Palil, M. R. (2010). Tax Knowledge and Tax Compliance Determinants in Self-Assessment System in Malaysia [The University of Birmingham]. https://etheses.bham. ac.uk//id/eprint/1040/1/Palil10PhD.pdf

Parys, S. Van. (2012). The effectiveness of tax incentives in attracting investment: evidence from developing countries. Reflets et Perspectives de La Vie Économique, LI(3), 129. https://doi.org/10.3917/ rpve.513.0129

Revilla, M. L. D. (2016). Cross-country econometric study on the impact of fiscal incentives on FDI. http://hdl.handle.net/10419/173538

Sari, R. (2020). Urgensi Stimulus Perpajakan Sektor Manufaktur Akibat Pandemi Covid-19. In Puslit (Ed.), Info Singkat (Vol XII No). Pusat Penelitian Badan Keahlian DPR RI.

Smith, A. (1776). An Inquiry into the Nature and Causes of the. Wealth of Nations (S. M. Soares (ed.); 2007th ed.). Metalibri Digital.

Stausholm, S. N. (2017). Rise of ineffective incentives: New empirical evidence on tax holidays in developing countries. SocArXiv. https://doi.org/https://doi.org/10.31235/ osf.io/4sn3k

Sunarti, E. S. ( 2011 ) . Pajak Melindungi Ketersediaan Air Tanah. Jurnal Legislasi Indonesia, 8(1), 117–138.

Thuita, G. W. (2017). An Investigation of the Effect of Tax Incentives on the FDIs: A Case of EPZs in Athi River Kenya. Ournal of Accounting, Finance and Auditing Studies, 3(1), 17–36

Designing Interest and Tax Penalty Regimes, Pub. L. No. IMF Tax Law Technical Note 19/01 (2019).

Wiedemann, V., & Finke, K. (2015). Taxing investments in the Asia-Pacific region: The importance of cross-border taxation and tax incentives. http://ftp.zew.de/pub/zew- docs/dp/dp15014.pdf