Government Opens Opportunity to Review the Elimination of JHT and THR Taxes
JAKARTA - Finance Minister Purbaya Yudhi Sadewa stated that the government would review the proposal of a number of trade unions who asked that taxes on the payment of Old Age Security (JHT) and Holiday Allowance (THR) be removed or taxed at 0 percent.
Purbaya revealed that until now he had not received an official letter from the President of the Confederation of Indonesian Workers' Unions (KSPI), Said Iqbal, containing the request.
However, he added that the government would ensure that it would study the proposal by reviewing the applicable regulations and comparing it with best practices in various countries.
"Not yet (received the letter). Later we will see what the existing rules are. We will also compare with what the best practices in the world are like. So it can be given or not depends on the results of the study," he told the media, quoted Tuesday, June 30.
According to him, the aspect of justice will be the main consideration in the evaluation process, and the government will also examine the profile of JHT beneficiaries, especially those who withdraw large amounts of funds.
Purbaya explained that the disbursement of JHT up to Rp50 million is currently subject to a final tax rate of 0 percent, and the government will identify how many recipients have disbursed funds above the limit.
According to him, this step was taken so that policy changes would not actually benefit high-income groups.
"We will check. It is up to Rp50 million, the tariff is 0 percent. We will see how much the one who pays above Rp50 million is. Don't let me give it to the rich people. So I will investigate," he said.
He emphasized that the tax provisions on the disbursement of JHT have been regulated in laws and regulations, so that any changes must go through a thorough study.
"That is the rule of the existing law, we see. But don't let me change the policy that ultimately benefits the rich," he said.
Currently, the tax on the disbursement of JHT is regulated in Government Regulation (PP) Number 68 of 2009.
Based on the rules, the JHT benefits paid at once are subject to Income Tax (PPh) Article 21 Final with a rate of 0 percent for gross income up to Rp50 million, while the part exceeding Rp50 million is subject to a 5 percent rate.
The proposal to abolish the tax came after a number of trade unions protested the reduction of income tax on the disbursement of JHT, and they argued that the JHT fund is a worker's savings from salary deductions during the working period, so it should not be taxed again when it is disbursed, especially when workers enter retirement or experience layoffs. (PHK).