Jokowi Just Signed New Regulation Regarding Income Tax

Jokowi Just Signed New Regulation Regarding Income Tax
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President Jokowi has just signed Government Regulation Number 55 of 2022 concerning the Adjustment of Regulations in the Field of Income Tax. In this new regulation, there are an easing and exemption from income tax (PPh) obligations for several groups.

In the regulation that will take effect soon, easing and exemption from income tax (PPh) obligations will be given to individuals and small entrepreneurs, as stipulated in the Law on Harmonization of Tax Regulations (HPP).

The criterion is that people whose salary is below IDR 4.5 million per month are not subject to tax because they are below the non-taxable income limit (PTKP). Meanwhile, the current PTKP is still IDR 4.5 million per month or IDR 54 million per year.

Thus, workers with a salary of IDR 4.6 million and above will be taxed annually with the lowest rate bracket, which is 5%.

Meanwhile, this rule also regulates taxes for traders who run their own businesses or individual MSMEs. Small shop traders, coffee shops, and other small stalls with a maximum turnover of IDR 500 million per year are subject to tax.

Previously, individual MSMEs were all subject to tax because there was no regulation on turnover limits that were subject to tax. For example, income per year of only IDR 50 million or even IDR 100 million per year is still subject to 0.5% final income tax.

Furthermore, the following is the calculation of the tax rate for individuals:

  • Income of IDR 60 million is subject to a 5% rate
  • Income IDR 60 million to IDR 250 million is subject to a 15% rate
  • Income IDR 250 million to IDR 500 million is subject to a 25% rate
  • Income IDR 500 million to IDR 5 billion is subject to a 30% rate
  • Income of IDR 5 billion and above is subject to a 35% tariff.
    Meanwhile, the following is the calculation formula for PPh for MSMEs:
  • Taxable Income (PKP) = Turnover – PTKP (Rp 500 million)
  • PPh = PKP x 0.5%