Familiarize yourself with the Mechanism of Taxes on Agricultural Products

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From what Serpong tax consultants know, in Indonesia, agriculture is one of the largest sources of income. This is because Indonesia is an agricultural country that has high agricultural potential, it is not surprising that agriculture is called the key to the economy. As a source of income, of course, the agricultural sector can be taxed. How to apply taxes to agricultural products in Indonesia and what types of taxes are imposed, find out in the following review.

Food needs are basic needs that are always needed. Therefore, development in the agricultural sector is an important thing that must be done and continues to be one of the government's focuses. In Indonesia, the agricultural sector is divided into two categories which include:

• Large Plantation Sector Both Privately Owned or State Owned

Which focuses on producing export commodities such as rubber and palm oil.

• Small Farmer Production

Focusing on producing foodstuffs such as rice, corn, fruit and vegetables.

The role of the agricultural sector in Indonesia's economic growth is very important. Where the acquisition of the agricultural sector has increased compared to previous years. Increased agricultural production in Indonesia alone is able to provide food resources and reduce inflation significantly. Thus, the agricultural sector is one of the important things that needs to be continuously developed and improved.

Agricultural Produce Tax

Results from the agricultural sector are one of the categories of taxable goods or known by the abbreviation BKP. In which the BKP is handed over by the farmer group to buyers with business circulations that have revenues above Rp. 4.8 billion. Serpong tax consultant is the solution to your tax problems.

In the mechanism for imposing VAT on the agricultural sector, farmers have an obligation to take into account all input taxes that have been paid. That includes taxes on fertilizer purchases and other farming needs. Where then they are obliged to deposit taxes into the state treasury.

The collection of VAT on the delivery of certain agricultural products from groups of farmers constituting PKP to the industry is subject to a 1% tariff. The effective 1% VAT rate is imposed because the tax base for the delivery of certain agricultural products uses another DPP value, which is 10% of the selling price. Industrial business entities that buy from farmers are appointed as 1% VAT collectors and can still credit the relevant VAT as input tax.

Serpong tax consultants help you in calculating and reporting taxes with the right steps that are efficient. As a taxpayer, of course you also need to know what types of agricultural products can be taxed. The following types of agricultural products can be subject to DPP VAT another 1% value.

1. Agricultural products

Agricultural products such as horticulture which consists of Non BKP, basic needs   (fruits, vegetables). Then BKP (ornamental and medicinal plants) AND Non BKP (food crops such as rice, corn, peanuts, cassava, rice and grain).

2. Plantation products

All plantation products that can be subject to 1% VAT DPP are included in the BKP or Taxable Goods category. Some of these products include coffee, sugar palm, cocoa, cashew, pepper, nutmeg, cloves, tea, tobacco, rubber, cotton, kapok, cinnamon, quinine, vanilla, patchouli, lemongrass, essential oils, and coconut.

3. forest products

Forestry products that can be subject to a 1% VAT DPP rate can be categorized into two types which include:

• Timber Forest Products (large/small logs, sawut logs, dry logs, and rubber logs).
• Non-timber forest products (non-timber rattan, WS round rattan, Kamendangan, agarwood sapwood, candlenut seeds, tengkawang seeds, copal resin).

That was a brief discussion related to the imposition of taxes on the agricultural sector. If you are in Serpong, you have tax problems, and need help from a Serpong tax consultant , you can contact us on this page for online tax consultation. So that your business tax payments are optimal and not expensive.

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