Tax Relief During the Pandemic
During the 2020–2022 pandemic period, the government issued a series of significant tax-relief policies — from a Corporate Income Tax rate cut, MSME Final PPh facilities, to sector-specific incentives. For Bali operators hit hardest by the tourism shutdown, this package was a critical lifeline.
CIT rate cut
One of the most material moves was cutting the Corporate Income Tax rate from 25% to 22% (FY 2020 and 2021), with a planned further cut to 20% — though the 20% step was later held back. The policy applied automatically with no application required, but had to be reflected in the annual tax computation.
PPh 25 instalment reduction
Taxpayers whose turnover dropped significantly due to the pandemic could apply for a PPh 25 instalment reduction based on lower current-year profit estimates. For hotel, restaurant, and tour-operator clients, this meant substantial year-round cash-flow relief.
Government-borne PPh 21
For certain sectors (including hospitality), employee PPh 21 was borne by the government for a defined period. Employees received net pay without withholding, while the company still filed but didn't remit. Required meticulous administration to avoid later corrections.
Accelerated refunds
For specific VAT refund claims, the audit period was accelerated to 1 month (from the standard 12), with an advance-refund option. Particularly helpful for exporters and companies often in a VAT overpayment position.
Lessons from the relief period
The pandemic experience taught us that good tax relief is relief that: executes quickly (no extended bureaucracy), targets genuinely affected sectors, and is clearly communicated to taxpayers. Many operators missed facility opportunities simply because they didn't know they were available.
Post-pandemic position
Most pandemic facilities have ended. But the experience from that period remains relevant: if a similar crisis returns, the government has a tested playbook, and tax consultants become an effective distribution point for the information to clients.