Three Tax-Free People Category, Income Singles IDR 4.5 Million Per Month Included?

YOGYAKARTA The tax free person category is listed in Law Number 7 of 2021 concerning Harmonization of Tax Regulations (HPP).

Through the law, the government provides concessions to several community groups for tax obligations. In fact, some are deliberately excluded from the obligation to pay income tax (PPh).

According to the HPP Law, there are several categories that are exempt from taxes due to the taxable income limit (PKP), which is Rp. 60 million per year or Rp. 5 million per month.

However, people who already have a Taxpayer Identification Number (NPWP) still have to report their annual SPT with a March 31, 2023 limit for individuals and taxpayers up to April 30, 2033.

The following is the tax-free category according to Law Number 7 of 2021 concerning Tax Harmonization:

The first group to be exempt from the tax pay category is trading business actors whose businesses are run by themselves or private MSMEs with sales turnover below IDR 500 million per year.

Previously, individual MSME actors were all taxed because there were no tax restrictions on turnover. For example, income per year is only Rp. 50 million or even Rp. 100 million per year, still subject to final income tax of 0.5 percent.

However, with the passing of Law Number 7 of 2021 concerning Harmonization of Tax Regulations, individual MSME actors only need to pay taxes if the turnover per year is above Rp500 million.

Small businesses with sales turnover below IDR 500 million per year are taxed. Big companies have a tax of 22 percent," said Finance Minister (Menkeu) Sri Mulyani Indrawati via her personal Instagram account @smindrawati, quoted by VOI, Monday, January 9, 2023.

Based on Law Number 7/2021, income tax is imposed on employees who have an income of more than IDR 4.5 million a month or IDR 54 million a year.

This means that income below that value is free from taxes and is only required to report SPT.

Meanwhile, for single people or those who do not have dependents who earn IDR 5 million per month, they are subject to a tax of 0.5 percent.

"If you are single, you do not have anyone's responsibility, the salary is Rp. 5 million, the tax is paid Rp. 300,000 per year or Rp. 25,000 per month. This means that the tax is 0.5 percent," said Sri Mulyani.

Employees who have an income of IDR 5 million but are married and have 1 child dependents are also exempt from taxes.

The reason is, the PTKP category is set up to IDR 63 million / year or IDR 5.25 million / month.

"If you already have a wife and one child dependents, the salary of Rp. 5 million per month is not taxed," explained Sri Mulyani.

New Employee Tax Rate

In the HPP Law, there are five categories that are required to pay taxes, including:

That's the information about the tax-free category of people. May it be useful!