Analysis of the Corporate Income Tax Cuts Policy Year 2020 to Mitigate the Effect of Covid- 19 Outbreak on the Indonesian Economy

  • Made Laksmi Sena Hartini Faculty of Economics and Business, Universitas Mahasaraswati Denpasar
  • I Dewa Made Endiana Faculty of Economics and Business, Universitas Mahasaraswati Denpasar


The decrease in Indonesia's economic growth rate due to
Covid-19 outbreak resulted in the Government issuing various
stimulus/policies to mitigate the impact of this huge Covid-19 shock, one of the policies issued in the form of tax policy. This study used
explorative and descriptive approach. This is a literature study with
qualitative approach. Based on the conducted study, one of the
extraordinary policies issued by the Government is the issuance of The Government Regulation Law No. 1 of 2020 (Perppu 1/2020) on March 31, 2020. One of the policies highlighted in Perppu 1/2020 is the policy of cutting the Corporate Income Tax (PPh Badan) Rate from 25% to 22% for the 2020-2021 tax year and for tax year 2022 onwards using a 20% rate. The expected positive impact of this Policy is to improve the liquidity of the company and secondly with the adjustment of the instalment of Income Tax Article 25 (PPh Pasal 25) can prevent the tax overpayment of corporate taxpayer due to the decrease on business profit as impact of Covid-19 outbreak. The negative impact that can be caused is the potential loss in tax revenue