Indonesian Taxation

Abstract

In Indonesia, Taxes Are Obligatory Citizen Contribution. This means that everyone has an obligation to pay taxes. However, this only applies to citizens who have met the subjective and objective requirements. Namely, citizens who have incomes exceeding Non-Taxable Income (PTKP). The current PTKP is Rp. 54 million per year or Rp. 4.5 million per month. That means, if you have an income of more than Rp.4.5 million a month it will be taxable. Meanwhile, if you are an entrepreneur or entrepreneur with turnover, the Final Income Tax rate of 0.5% applies from the total gross turnover (turnover) up to IDR 4.8 billion in one tax year (based on PP 23 of 2018). Taxes are Compulsory for Every Citizen. If someone has met the subjective and objective requirements, then he is obliged to pay taxes. In the tax law, it 2 has been explained, if someone deliberately does not pay the tax that should be paid, then there is the threat of administrative sanctions as well as criminal penalties. Citizens Do Not Get Direct Benefits. Tax is different from retribution. Examples of fees: when you get parking benefits, you have to pay a certain amount of money, namely parking fees, but taxes are not like that. Tax is a means of equalizing citizens' income. So when you pay a certain amount of tax, you don't immediately receive the benefits of the tax paid. What you will get, for example, is in the form of road repairs in your area, free health facilities for families, educational scholarships for your children, and others. Tax is regulated in state law. There are several laws that regulate the mechanisms for calculating, paying and reporting taxes.