An Analysis of VAT Remittance Efficiency through Tax Compensation Mechanisms on Government-Borne Property VAT Incentives: Evidence from PT X (2021–2025)

Abstract

This study aims to analyze the efficiency of Value Added Tax (VAT) remittance through the utilization of tax compensation on Government-Borne Property VAT incentives at PT X during the 2021–2025 fiscal years. The study employs a qualitative method with a descriptive-analytical approach using secondary data, including VAT returns, tax invoices, and relevant tax regulations. The findings indicate that the implementation of the Government-Borne VAT incentive results in zero-rated output VAT, while input VAT remains creditable, leading to VAT overpayments in certain periods. These overpayments are utilized through a carry-forward compensation mechanism to subsequent tax periods, which contributes to improving VAT remittance efficiency, particularly when the company returns to an underpayment position after the incentive period ends. However, challenges remain, including regulatory uncertainty and administrative errors. Therefore, tax compensation functions not only as an administrative mechanism but also as a strategic instrument in managing the company’s VAT obligations.