The Finance Ministry’s Directorate General of Taxes (DJP) clarified that the Taxation Regulation Harmonization Law passed in 2021 does not establish new taxation schemes for taxpayers, with an annual salary of Rp60 million.

Law No. 7 of 2021 on Taxation Regulation Harmonization, enhanced by Government Regulation No. 55 of 2022 that adjusts the income tax scheme for personal taxpayers, instead ensures a fairer taxation scheme for lower- and middle-income residents, DJP’s Director of Assistance, Services, and Public Relations, Neilmaldrin Noor, emphasized.

“The five-percent income tax for taxpayers whose annual income within the threshold is unchanged,” Noor noted, as per the statement here, Tuesday.

The five-percent tax rate, earlier applied only to personal taxpayers whose annual income does not exceed Rp50 million, has been made applicable to taxpayers with maximum annual income of Rp60 million by the new law, the DJP department director noted.

In addition, the new law levied a 15-percent income tax for residents, with annual income in the range of Rp60 million-250 million, and taxpayers, with annual income within the Rp250 million-500 million bracket, will be levied an income tax of 25 percent, he said.

The 30-percent tax rate, the maximum rate levied on any taxpayer, with annual income exceeding Rp500 million on the old law, would instead be levied on taxpayers with annual income within the bracket of Rp500 million to Rp5 billion by the new regulation.

The new law established a maximum income tax rate of 35 percent levied on each taxpayer, with income exceeding Rp5 billion, he added.

Meanwhile, Noor reminded taxpayers to deduct the Rp54 million non-taxable income — unchanged from the old regulation — from their annual income before calculating their final income tax.

“Do not forget the non-taxable income while calculating the owed tax, which means that the annual income must be subtracted by Rp54 million before applying the five-percent tax rate and so on,” the DJP official explained.

As an illustration, an unmarried personal taxpayer, with Rp60-million annual tax, will have a taxable income of Rp6 million after subtracting Rp54-million non-taxable income before calculating the final income tax. With the Rp6-million taxable income multiplied by the five-percent tax rate, the person’s final income tax would be Rp300 thousand.

Source: Antara News