Harmonized tax law lays firm basis for advanced Indonesia: ministry

Harmonized tax law lays firm basis for advanced Indonesia: ministry

Two tax officers chat during the commemoration of the 2019 Tax Day at the Taxation Directorate General Building on July 14, 2020. (ANTARA FOTO/Aprillio Akbar/wsj)

This means that MSME individual taxpayers who have an annual gross turnover of up to Rp500 million are exempt from income tax
Jakarta (ANTARA) - The enactment of the harmonized tax law will lay a firm basis for encouraging fiscal reforms to turn Indonesia into an advanced nation by 2045, according to the Finance Ministry.

The ministry said it believes that the law will be able to create a more just taxation system that ensures legal certainty, thereby helping expand the tax base and increase taxpayer compliance.

“The efforts are made by always keeping the balance between the general public’s interests and the economic dynamic in the future,” chief of the Fiscal Policy Board of the Finance Ministry, Febrio Kacaribu, said in Jakarta on Thursday

“In the field of income tax, the effort will be made by improving policies, including those related to incentives for micro, small, and medium enterprise (MSME) taxpayers, improving income tax progressive tariff for individual taxpayers and administrative improvement,” he said.


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The administrative improvement includes the use of citizenship identification numbers (NIK) as taxpayer code numbers for individual taxpayers, he informed.

The harmonized tax law will also increase sidedness with MSME individual taxpayers through the granting of incentives in the form of untaxed income limit for gross turnover of up to Rp500 million per year, he noted.

“This means that MSME individual taxpayers who have an annual gross turnover of up to Rp500 million are exempt from income tax,” taxation director general Suryo Utomo said.

MSME corporate taxpayers remain entitled to a 50-percent tariff discount on income tax, in accordance with Article 31E of the Income-tax Law so they are expected to increase their resilience and competitiveness in the country, he added.


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