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GOVERNMENT REGULATION OF THE REPUBLIC OF INDONESIA
NO. 42/1995

ON
Exemption of Import Duty and Surcharge, Value Added Tax and Luxury Tax Not Collected, and Income Tax Cover By Government, for Import of Goods for Government Project Funded By Grant

THE PRESIDENT OF THE REPUBLIC OF INDONESIA,

Considering:

• a. that with a view to supporting the Implementation of government projects financed with foreign grants or loans, it is deemed necessary to provide customs and taxation facilities;
• b. that in connection with the above matter, it is deemed necessary to stipulate provisions concerning import duty, import surcharges, value added tax and sales tax on luxury goods as well as income tax within the framework of implementing government projects financed with foreign grants or loans, in a government regulation.

In view of :

• 1. Article 5 paragraph (2) of the Constitution of 1945;
• 2. The Dutch East Indies Tariff Law (Statute Book of 1873 No. 35) as already amended and supplemented;
• 3. The Customs Ordinance (Statute Book of 1931 No. 471) as already amended and supplemented;
• 4. Law No. 6/1983 on general tax provisions and procedures (Statute Book of 1983 No. 49, Supplement to Statute Book No. 3262) as already amended by Law No. 9/1994 (Statute Book of 1994 No. 59, Supplement to Statute Book No. 3566);
• 5. Law No. 7/1983 on income tax (Statute Book of 1983 No. 50, Supplement to Statute Book No. 3263), as already several times amended, the latest by Law No. 10/1994 (Statute Book of 1994 No. 60, Supplement to Statute Book No. 3567);
• 6. Law No. 8/1983 on value added tax on goods and services and sales tax on luxury goods (Statute Book of 1983 No. 51, Supplement to Statute Book No. 3264) as already amended by Law No. 11/1994 (Statute Book of 1994 No. 61, Supplement to Statute Book No. 3568);
• 7. Government Regulation No. 6/1969 on import levies (Statute Book of 1969 No. 7) as already amended and supplemented, the latest by Government Regulation No. 26/1938 (Statute Book of 1988 No. 50, Supplement to Statute Book No. 3384);
• 8. Government Regulation No. 50/1994 on the implementation of Law No. 8/1983 on value added tax on goods and services and sales tax on luxury goods as already amended by Law No. 11/1994 (Statute Book of 1994 No. 79, Supplement to Statute Book No. 3581);
• 9. Government Regulation No. 47/1994 on the calculation of taxable income and settlement of income tax in the current year (Statute Book of 1994 No. 76, Supplement to Statute Book No. 3579;.

HAS DECIDED:

To stipulate:

EXEMPTION OF IMPORT DUTY, IMPORT SURCHARGES, VALUE ADDED TAX AND SALES TAX ON LUXURY GOODS NOT COLLECTED AND INCOME TAX COVER BY GOVERNMENT FOR GOODS IMPORTED WITHIN THE FRAMEWORK OF IMPLEMENTING GOVERNMENT PROJECTS FINANCED WITH FOREIGN GRANTS

Article 1

Imports within the framework of implementing government projects financed with foreign grants or loans, shall be exempted from import duty and import surcharges which are due as of April 1, 1995.

Article 2

The import and delivery/provision of goods and services within the framework of implementing government projects financed with foreign grants or loans, shall not be subject to collection of value added tax and sales tax on luxury goods which are due as of April 1, 1995

Article 3

The income received or earned by contractors, consultants, and suppliers from work done/goods provided within the framework of implementing government projects financed with foreign grants or loans, shall have its income tax which is due as of April 1, 1995, borne by the government.

Article 4

Further provisions required for the implementation of this government regulation shall be stipulated by the Minister of Finance.

Article 5

With the enforcement of this government regulation, Presidential Decree No. 13/1995 shall be declared null and void.

Article 6

This government regulation shall come into force as from the date of stipulation and be retroactively valid as of April 1, 1995.

For public cognizance, this government regulation shall be promulgated by publishing it in the Statute Book of the Republic of Indonesia.

Promulgated in Jakarta
On November 30, 1995
THE PRESIDENT OF THE REPUBLIC OF INDONESIA,
sgd.
SOEHARTO

Stipulated in Jakarta
On November 30, 1995
THE MINISTER/STATE SECRETARY,
sgd.
MOERDIONO