Making payments less taxing
About PT. Garudafood Group
PT. Garudafood Group is one of the largest food and beverage companies in Indonesia. Founded in 1958 and based in Jakarta, the Group comprises five companies whose businesses focus on the manufacturing and marketing of snacks, biscuits, confectioneries, basic food and dairy products. The company offers its products through distributors in Indonesia.
The toll of tax payments
As a major manufacturing firm, Garudafood is required to pay several taxes encompassing the entire manufacturing process, from import tax on imported raw materials to export tax on finished products. These taxes (including corporate and customs taxes) must be paid in order for things to proceed smoothly.
The biggest pain point arises from the turnaround time required for tax payment processing. With their existing procedures, which included both paper-based and online portal submissions, generating the billing code* took Garudafood anywhere between 10 to 15 minutes per billing code*. The end-to-end process was tedious and time consuming, and could take equally long, especially for corporate tax payments as the billing codes could only be input one-by-one.
And, because F&B manufacturing is a time-sensitive industry, delays in payment processing can lead to significant financial and reputation losses. These include:
- An increase in port-warehouse rental fees as a result of raw materials being left in port;
- Production delays due to the unavailability of raw materials;
- Customers not receiving goods on time, thus lowering customer satisfaction; and
- A penalty for late corporate tax payment imposed by Indonesia's Department of Taxation.
With all these potential problems in mind, Garudafood required a solution that would improve efficiency, and reduce the turnaround time for end-to-end tax payment transactions.
A recipe for the perfect solution
Thankfully, DBS offered an insight-led streamlined integrated tax payment solution using IDEAL MPN G2 Tax Payment System, which is simpler, faster and smarter.
Through this agile system, billing codes can be generated in seconds, either by directly inputting the tax payment information on-screen, or by direct upload using the Tax File Template for bulk payments and the retrieval of ID Billing from the tax authorities for more convenient processing. This significantly reduced the turnaround time by 80% to just 2-3 minutes. This meant Garudafood was able to benefit from remarkable savings especially for bulk billing codes.
The template-based system also meant fewer errors during input and processing. And, because the transactions are made on IDEAL, Garudafood is now able to create, pay and receive electronic tax receipts on a single platform.
Other advantages of the solution include:
- Enhanced security without the need for manual paper-based submissions; and
- Longer payment cut-off time compared to manual submissions (8pm vs 3pm).
With the implementation of the DBS IDEAL eTax system, Garudafood can now worry less about a business process that was taking up too much time and effort.
Most notably, by digitising virtually all of the tax payment procedures, the important BPN** (Bukti Penerimaan Negara) tax receipt documents can be safely downloaded as PDF (Portable Document Format) files, instead of physical printing at the bank.
In addition, submission mistakes due to human error are greatly reduced, and the customer can focus their commitment on core business activities for greater efficiency and productivity.
"IDEAL MPN G2 eTax has provided great convenience in relation to our tax payment activities, even though the processing is done on the cut-off day of tax payment, the NTPN*** can be acquired very quickly."
Veronica Nensi, Head of Corporate Tax Payment GarudaFood Putra Putra Putri Jaya
*Billing code is a 15-digit unique number that tax payer receives after they input their tax information for payment, either through Department of Taxation of Indonesia portal or through IDEAL 3.0 Internet Banking. There is a unique billing code for each tax item to be paid.
**BPN (Bukti Penerimaan Negara) is a tax receipt document, which consists of tax payment information. This document is the physical document that a tax payer will need to provide for their monthly tax reconciliation with the Department of Taxation of Indonesia.
***NTPN (Nomor Tanda Penerimaan Negara) is a unique 16 characters tax receipt number after tax payment has been paid. This is the final proof that tax payment has been fully paid.
Discover a spectrum of opportunities
Explore DBS Treasury Prism to discover how you can create a similar cash management solution for your business. If you'd like to read more case studies, simply click on Case Studies on the left.
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