Indonesia's tax authorities are planning to revise the non-taxable income regulation again in an attempt to improve the nation's low tax ratio. Last year the government of Indonesia raised non-taxable income by 50 percent from IDR 36 million (approx. USD $2,700) to IDR 54 million (approx. USD $4,060), per year, in a bid to strengthen people's purchasing power and encourage household consumption. However, considering local minimum wages vary across the country's 34 provinces, the nation-wide non-taxable income level of IDR 54 million causes some problems.
14 June 2022 (closed)
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Berita Hari Ini Non-Taxable Income
Stocks in Asia were mostly up on Tuesday (12/04) supported by the weaker Japanese yen (retreating after a seven-day rally again the US dollar) and rising commodity prices (with crude oil touching a 2016 high at USD $43 per barrel after the US dollar weakened). Indonesia's benchmark Jakarta Composite Index rose 0.89 percent to 4,829.57 points, while the rupiah appreciated 0.14 percent to IDR 13,115 per US dollar (Bloomberg Dollar Index). Several analysts claim that the positive performance of Indonesian assets was also due to the government's plan to cut the corporate income tax to 20 percent and raise the non-taxable personal income tax by 50 percent.
Indonesia's plan to raise people's (annual) non-taxable income by 50 percent to IDR 54 million (approx. USD $4,090) is estimated to add 0.3 percentage point to consumption growth in Indonesia according to Indonesia's Finance Minister Bambang Brodjonegoro. Last week, Brodjonegoro announced this tax incentive with the aim to strengthen Indonesians' purchasing power and encourage household consumption. Household consumption, which accounts for about 56 percent of Indonesia's overall economic growth, has been curtailed in recent years amid slowing economic growth, high inflation and the weak rupiah rate (against the US dollar).
On 10 April 2016, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website over the last seven days. Most of the topics involve hot topics and economic matters such as Indonesian links to the controversial Panama Papers, the cut in 2016 government spending, higher non-taxable income, public debt, oil output, a corruption case, profiles of Indonesian companies, and more.
The government of Indonesia plans to raise non-taxable income by 50 percent from IDR 36 million (approx. USD $2,727) to IDR 54 million (approx. USD $4,090) in a bid to strengthen people's purchasing power and encourage household consumption. Although at first sight this move should lead to curtailed (income) tax collection, the Indonesian government expects that rising household consumption and investment will lead to higher value-added tax (VAT) and corporate income tax revenue. This should then add 0.16 percentage point to the nation's gross domestic product (GDP) growth.
Artikel Terbaru Non-Taxable Income
More changes to Indonesia's tax system are in the pipeline. Today (11/04), Indonesia's Finance Minister Bambang Brodjonegoro said Southeast Asia's largest economy plans to cut the corporate income tax rate to 20 percent this year (from 25 percent currently). According to Brodjonegoro a 20 percent corporate tax rate is more competitive and will attract investment. Indonesia's finance minister expressed this plan in a meeting with the nation's parliamentary commission overseeing taxes (an income tax rate cut requires parliamentary approval).
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