Jakarta –
The Draft Law on the Harmonization of Tax Regulations (RUU HPP) has been approved by the DPR RI to become a law. That way, all the regulations contained in it can be implemented by the government starting next year.
Summarized by detikcom, Thursday (7/10/2021), here are the points in the HPP Law that you should know:
1. KTP Joins to become NPWP
Official Population Identification Number (NIK) plus its function for tax purposes. That way the KTP can become a Taxpayer Identification Number (NPWP) for individual taxpayers.
Even so, the existence of a NIK as a substitute for NPWP does not mean that 17-year-olds have to pay taxes. The criteria for taxpayers will continue to pay attention to certain conditions that are currently in effect.
“The use of a NIK does not mean that all Indonesian citizens are required to pay PPh, but still pay attention to the fulfillment of subjective and objective requirements for paying taxes, namely if an individual has a year’s income above the PTKP (non-taxable income) or an individual entrepreneur has a gross turnover of more than Rp 500. million a year,” said Minister of Law and Human Rights Yasonna Laoly in a plenary meeting at the Indonesian Parliament Building.
2. 35% income tax rate for income above Rp 5 billion
The government adds a new layer to the individual income tax (PPh) rate. One of these provisions is the imposition of an income tax rate of 35% for people with incomes above Rp 5 billion.
The income tax rate is up 5% compared to what is currently in effect, which is 30% for income above Rp 500 million per year. In addition, the taxable income for the first layer which is subject to a 5% rate is changed, from the previous up to Rp 50 million per year to Rp 60 million per year.
On the other hand, non-taxable income (PTKP) has not changed, which is IDR 4.5 million per month or IDR 54 million per year for single individuals. Meanwhile, for married taxpayers, IDR 4.5 million per year, plus IDR 4.5 million per year for each dependent, a maximum of 3 people.
“This means that people with an income of up to Rp 4.5 million per month are still protected and do not pay income tax at all,” he said.
3. Fixed Corporate Income Tax 22%
The government has canceled reducing the corporate income tax rate for domestic companies and permanent establishments (BUT) to 20%. The corporate income tax rate next year will be the same as this year’s rate of 22%.
“In line with the global tax trend, which is starting to increase income from PPh but still maintaining the investment climate, the corporate income tax rate will remain at 22% for the 2022 tax year and beyond,” Yasonna said.
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