Promotion and sales expenses could be deducted from the grodd income of industry and pharmaceuticals. This was stipulated in the Regulation of the Ministry of Finance [PMK] No: 104/PMK.03/2009 which was effective as per January 1, 2009. The promotion and sales expenses might be deducted from gross income to maintain or boost sales to be spent naturally according to proper businessan’s attitude in the form of good, services, and facilitiesand accepted by the other party.
The promotion expenses, either for cigarettes or pharmaticeuticals might only be spent one time by the producer, main distributor, or sole importer, for the cigarettes with a turnover up to Rp 500,000,000,000,.- [five hundred billion rupiahs] the percentage of promotion expense should not exceed 3% and at the most Rp 10,000,000,000,.- [ten billion rupiahs] Meanwhile the cigarette industry whose turnover was above Rp 500,000,000,000,.-[five hundred billion rupiahs] up to Rp 5,000,000,000,000,.- [five trillion Rupiahs] the promotion expenses shall not exceed 2% or at the most Rp 30,000,000,000,- [thirty billion Ripiahs] The cigarettes industry whose turn over was above Rp 5,000,000,000,000,- [five trillion Rupihas] the promotion expense shall not exceed Rp 1 % or not more than Rp 100,000,000,000,- [one hundred billion Rupiahs].
Meanwhile for the pharmaceutical industry, the promotion expense was not more than 2% of the turnover or not more than Rp 25,000,000,000 [twenty five billion Rupiahs] In case of Promotion in the Form of give –away of product sample, the amount deductable from gross income was the equivalent of basic price. In addition to that the cigarette and pharmaceutical industries were obliged to make a normative list of promotion expenditures and/or sales expend itures spent on other parties . The normative list should at least include taxpayers ID [NPMP] and the amount of expenses spent. If not fulfilled, the promotion expenses and/or Sales expenses could not be deducted from gross income.