This added layer to the personal income tax rate is a form of effort to create justice within the taxation systemJakarta (ANTARA) - A higher tax rate of 35 percent on high wealth individuals (HWIs) earning over Rp5 billion per year would hopefully raise the state's revenue, a legislator has said.
The government has proposed to increase the personal tax rate of HWIs under the soon-to-be ratified Taxation Regulation Harmonization Bill (RUU HPP), according to member of Commission XI of the House of Representatives (DPR) Puteri Anetta Komarudin.
"This added layer to the personal income tax rate is a form of effort to create justice within the taxation system," Komarudin told ANTARA here on Tuesday.
The new rate is also expected to reduce income inequality and encourage income distribution toward poor citizens, she said.
"In addition, the bracket change can hopefully increase the state's revenue from individual tax, specifically the ones within the HWI category," Komarudin added.
To this end, the government should ensure that the tax administration system is ready to embrace this change so that the regulation implementation can become more optimal and tax avoidance can be prevented, she said.
The government should also ensure the availability of adequate data and information to identify individuals that belong to the HWI category, she added.
"With accurate data as the base, the government can conduct an optimal monitoring in order to secure compliance of taxpayers," Komarudin explained.
Earlier, the government and the DPR agreed to continue discussions on the Taxation Regulation Harmonization Bill during the level two discussion at the House plenary hearing, at the Commission XI work meeting on Wednesday (September 29, 2021).
On a separate occasion, deputy speaker of Commission XI Dolfie OFP, said that the new tax rate for HWIs would further fulfill the aspect of partiality and tax contribution division.
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Translator: Sanya Dinda, Fadhli Ruhman
Editor: Sri Haryati
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