Tax Collection System Implemented In Indonesia

Illustration of the tax collection system (pexels)

YOGYAKARTA The tax collection system is a mechanism used to calculate the amount of tax that must be paid by taxpayers. Each country has a different collection system, including in Indonesia. There are three types of tax collection systems imposed in Indonesia.

Reporting from tax.go.id, the system in the tax collection that applies in Indonesia is the Self-Assessment System, Official Assessment System, and Withholding Assessment System. Here's the explanation.

This system tends to the independence of taxpayers (WP). This means that the size of the tax that needs to be paid is determined by the taxpayer. Activities that include calculating, paying, and reporting taxes are carried out actively by taxpayers by coming to the tax service office (KPP). taxpayers will later take in through the online payment system that is already available.

In this system, the government only serves as a supervisor, examiner, and tax investigator. This system is usually applied to income tax (PPh) or value added tax (VAT).

This system is different from the Self-Assessment System. In this system, tax collection institution officials will determine the size of the tax that must be paid by taxpayers. In this system, the nominal amount of payable tax will be more accurate without any purpose of reducing or increasing the debt tax.

This system is applied to taxes collected by regions, such as the Land Building Tax (PBB), vehicle tax, and other types of taxes taken by the regions.

The feature of the Official Assessment System system is that the taxpayer is passive, on the other hand, the fiscus will be appointed to manage taxes. In addition, taxes that are payable will appear after the calculation is carried out and issued through a Tax Assessment Letter.

This system also gives authority to the government through tax collection institutions to determine the amount of tax that must be paid by taxpayers.

Another system implemented in Indonesia is the Withholding Assessment System. In this system, third parties are active papaling parties while having the authority to determine the amount or size of the nominal amount of the tax owed.

This party is usually filled by the treasurer or the tax division of the company which will cut employee income to pay taxes. After cutting the employee will get cut evidence which is an attachment in the annual WP Notification Letter (SPT) concerned.

Examples of taxes that apply this levy system in Indonesia are Article 21 PPh Article 22, Article 23 PPh, and Final PPh Article 4 paragraph (2).

That's information related to the tax collection system in Indonesia. Visit VOI.id to get other interesting information.