Regarding Income Above Rp5 Billions Of Taxable Taxes 35 Percent, The Government Is Considered To Increase State Revenue

JAKARTA - Finance Minister Sri Mulyani Indrawati has set a tax of 35 percent for individual taxpayers with incomes above Rp5 billion per year. The regulation is stated in Law Number 7 of 2021 concerning Tax Harmonization (HPP) and has been in effect since 2022.

Responding to this, Deputy Chairperson of the Indonesian Employers' Association (Apindo) Shinta Widjaja Kamdani understands the existence of this policy.

According to him, the government has set the policy solely to increase state revenues.

"In terms of increasing (tax) relations with individual taxes, I don't think this is too much of a concern. I think the government has continued to want to increase income so far, so look for which elements may not be very influential, which can then become (state) income," Shinta said when met at the Apindo Office, Jakarta, Tuesday, January 3.

Shinta assessed that the tax policy had been fully considered by the government, so that the public did not need to worry too much.

"We are all take and give, that's why all of these are participation, together. So, we can also understand that there are things that inevitably have to be done, but there are things that we (entrepreneurs) ask for, such as incentives," he added.

For your information, the rules regarding the imposition of taxes on income are not new rules. Previously, these rules were already in Law Number 36 of 2008 concerning Income Tax (PPh). Then, in the HPP Law there was a change in the PPh tariff layer.

In Law Number 36 of 2008, the lowest layer of PPh subject to tax is only up to IDR 50 million per year. The tax rate imposed is five percent. Then, in the HPP Law, the lowest layer of PPh is increased to IDR 60 million per year with the same tax rate.

Furthermore, in the HPP Law, the taxable income layer is expanded in the range, which is above Rp. 500 million to Rp. 5 billion subject to tax rates of 30 percent, while in the previous regulation, a tax rate of 30 percent was applied to taxpayers with income above Rp. 500 million.

In addition, taxpayers with income above Rp5 billion per year, in the HPP Law, tax is subject to 35 percent or an increase of five percent from the previous 30 percent.