Differences In Progressive And Proportional Tax Tariffs: Here's The Retail

Differences In Progressive And Proportional Tax Tariffs (Jcomp-Freepik Image)

YOGYAKARTA - As is known, in carrying out and paying tax obligations, Taxpayers are of course charged with a certain budget. The amount of certain expenses that must be paid can be known in terms of tax rates. Want to know what is the difference between progressive and proportional tax rates?

The tax rate itself is the nominal amount of state levies used as the basis for payment requirements for Taxpayers. This tax rate can also be in the form of a percentage that can notify the nominal of levies that must be paid by individual taxpayers (OP) or agencies.

Structurally, there are at least 4 types of tax rates. Starting from progressive taxes, degenerate rates, proportional rates, and regressive rates. However, in this post, we will regulate more about proportional tax rates as well as progressive tax rates. Reported from various sources, here is the full discussion.

Proposal Tax Tariffs

Usually at the proportional tax rate, tax collection on the percentage will remain and there will be no change to the entire basis for the imposition of taxes. It can be said that no matter how large the number of tax objects that will be imposed in the income tax, the percentage will always be the same.

Not only that, at this rate, the nominal amount of tax rates is generally the same, whether low, middle, or large income taxpayers are charged with the same tax rate regardless of the amount of income or assets owned. For example, this proportional tax rate is in the form of a gross revenue tax, a tax per capita, as well as a Value Added Tax (VAT).

In addition, the Directorate General of Taxes (DJP) has set a proportional tariff for VAT rates of 11 percent in 2022 in the Law on Harmonization of Tax Regulations (UU HPP), but for export tax rates for taxable goods there are special requirements set, namely subject to VAT of 0 percent.

The following are some types of tax objects imposed on VAT in accordance with the conditions of Law No. 42 of 2009, which are:

Progressive tax rates

In contrast to the proportional tax rate, the progressive tax rate is the tax collection rate with the percentage that will increase along with the increasing amount used as the basis for tax imposition, as well as an increase in percentage for each certain amount every time it increases.

In this type of tariff, tax rates will be comparable to tax obligations. If taxpayers have a greater wealth, the tax rates imposed will also increase. The purpose of this progressive tax rate is to influence people or taxpayers who have large or medium income, so that they realize that they are required to pay levies to the state in a larger amount.

An example of this progressive tax rate, one of which is the Income Tax (PPh). The following is the PPh OP tariff.

We also suggest reading the 'Vehicles of Tax Tariffs Applicable in Indonesia' so that you understand more about taxes.

So after knowing the difference in progressive and proportional tax rates, see other interesting news on VOI.ID, it's time to revolutionize news!