2021In 2019, several Finance Minister orders were issued to provide tax breaks due to the coronavirus pandemic, and there was a movement to reduce the tax burden on companies and individuals. On the other hand, in the tax field, the number of inquiries and tax audits from tax offices is increasing, and it is clear that the country is in financial trouble as it rushes to secure tax revenue. Then, in October 2021, the National Tax Regulations Harmonization Act was promulgated, which includes amendments to multiple tax laws. The revised law covers the National Tax Law, Income Tax Law, Value Added Tax Law, Excise Tax Law, etc., and will be applied from approximately fiscal year 2022, with the main focus being on tax increases.

１．Income Tax Act

(1) Corporate income tax

The current corporate income tax for 2021 is 22%. The tax rate, which was 25% until FY2019, has been reduced to 22% from FY2020. In addition, a revision to 20% from fiscal 2022 had been announced, but with this new law, the tax rate has been revised again and the tax rate from fiscal 2022 will also be 22%. (For listed companies that meet certain conditions, the rate has increased to 19%.) As a result of this revision, if the corporate tax budget for fiscal year 2022 was prepared at 20%, or if the tax rate was calculated at 20% in anticipation of long-term reversal of deferred tax assets recorded in previous years, or if the projected tax rate for fiscal year 2022 was calculated using the previously prescribed 20%, it will be necessary to recalculate at 22%.

(2) Personal income tax

Progressive personal income tax is currently 5% to 30%. The range of taxable income for the tax rate is 5% for up to 50 million rupiah, 15% for more than 50 million rupiah to 250 million rupiah, 25% for more than 250 million rupiah to 500 million rupiah, and 30% for more than 500 million rupiah, and the highest tax rate is 30%. The revised tax rate under the new law is that the 5% taxable income has been expanded to 60 million rupiah, and a 35% tax rate has been newly set for taxable income exceeding 5 billion rupiah. Due to this revision, the new tax rate will be applied to income tax calculations during payroll calculations from FY 2022, so please be sure to update the income tax calculation software used by each corporation and change the calculation formula if it is calculated using Excel before calculating payroll for the January period of 2022. In addition, with the amendment to the National Tax General Rules Act, in order to expand the scope of personal income tax, even those who have not obtained an NPWP (taxpayer identification number) will be recognized as individuals through their NIK (individual identification number), and those who have income that reaches the taxable amount will be required to pay taxes.

2. value added tax

The current value added tax rate is 10%, but the new law will change the rate to 11%. The change in the value added tax rate was stipulated to start from April 1st, not from January 1st. It also stipulates that the tax rate will rise to 12% by 2025. Along with the increase in tax rates, items that fall under the category of daily necessities of the people, medical and educational fees, etc., which were previously exempt from taxation, are no longer subject to tax exemption, and the scope of taxable items is expanding.

関連法令：LAW OF THE REPUBLIC OF INDONESIA NUMBER 7 YEAR 2021