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Tax and Revenue Management

Indonesia extends VAT refund system for tourists

By Johanna Morden | 24 February 2011

The tax department of Indonesia has extended its VAT refund scheme for tourists by linking its system to more retailers.

More stores in Jakarta and Bali, tourist-heavy areas, have been accredited by the Directorate General of Taxes (DGT), bringing the number up to thirty stores.

When the VAT refund scheme was piloted last year, only eight stores were included in the scope.

The DGT developed a system connecting the cash registers or computers of these accredited stores to its data centres set up in DGT VAT refund counters found in the major airports of Soekarno-Hatta in Jakarta and Ngurah Rai in Bali.

This makes claiming refund easier for tourists, who are eligible for VAT refunds on purchases made in these accredited stores.

Yoyok Satiotomo, Director of the Centre of Information & Technology of Taxation at the DGT, told FutureGov Asia Pacific that the DGT plans to include more retailers and stores in its accredited list. “Someday we may even add shopping malls to the list,” he said.

The DGT has been buoyed to extend the coverage of its VAT refund scheme due to the rising number of VAT refund claims from tourists and applications by retail outlets to join the scheme.

Up to 10 per cent may be slashed off the original prices of products when VAT has been deducted.

Satiotomo hoped that the recent improvements in the VAT refund scheme will lure more foreigners to purchase goods in the country.

“It’s common to see foreigners buy more products using the money they get from VAT refunds,” he said.

Tourists are eligible for VAT refunds for purchases made in accredited stores when they have not stayed in Indonesia for more than two months from date of entry.

Accredited stores are distinguished by a “VAT Refund for Tourists” logo in their establishment. The list of accredited stores is available at the DGT website (http://www.pajak.go.id/eng/).

For refund purposes, the tourist would need one valid tax invoice with a minimum VAT amount of Rp500,000 (US$56.50), purchased within one month from leaving the country.

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