National textile industry players believe that the government's tightening tax restitution policy, which began to be implemented on May 1, 2026, will not have a significant impact on business performance or company cash flow. This confidence emerged after the government issued new regulations governing the procedures for preliminary refunds of tax overpayments.
Farhan Aqil Syauqi, Secretary General of the Indonesian Filament Fiber and Yarn Producers Association (APSyFI), stated that tax restitution is essentially a refund of overpayments, and therefore not a primary source of business continuity for the textile industry. Therefore, this policy change is seen as a reasonable step and will not disrupt company financial stability.
According to him, a company's financial condition is more determined by daily operational activities, particularly sales and profit. Textile companies' cash flow generally depends on market forces and business performance, not on tax restitution. Therefore, the existence or nature of the restitution scheme is not a critical factor in maintaining business continuity.
On the other hand, APSyFI also encourages the government to implement stricter oversight of potential tax refund protections that may have occurred. Increasing requirements for filing for refunds, such as requiring financial reports with an Unqualified Opinion (WTP) for three consecutive years and correcting fiscal profits by a maximum of five percent, are considered appropriate steps to increase transparency and accountability.
The association also believes that if this policy is tightened, investigations are needed into parties suspected of exploiting loopholes in the refund system. Data transparency and law enforcement are crucial for fiscal policy to be more effective and fair for all business actors.
While supporting the government's move to tighten tax refunds, textile industry players remain aware that this sector is facing significant pressure. Rising raw material prices and rampant import dumping practices are major challenges affecting the competitiveness of the domestic industry.
To maintain industry demand, APSyFI encourages the government to provide additional incentives, one of which is through a temporary Value Added Tax (VAT) policy. A VAT reduction or relaxation scheme for a specific period, such as six months, is considered to help businesses survive market pressures and also serve as a basis for evaluating the policy's effectiveness.
This tax restitution tightening policy is officially regulated in Minister of Finance Regulation (PMK) Number 28 of 2026, signed by Minister of Finance Purbaya Yudhi Sadewa. This regulation replaces several previous provisions, including PMK Number 39/PMK.03/2018 to PMK Number 119/2024, as part of the government's efforts to strengthen more transparent and sustainable fiscal governance.