Governmemt Mulls Plan to Raise Income Tax Threshold
28 May 2015 16:56 WIB
TEMPO.CO, Jakarta - The government is mulling to revise the income tax exemption threshold (PTKP) from its' current set amount of Rp 24.3 million per annum to Rp 36 million per annum in an effort to increase the public's purchasing power.
"We have lodged a request to the House of Representatives (DPR) to discuss the matter," said Finance Minister, Bambang Brodjonegoro during a meeting with Commission XI of DPR in Jakarta on Wednesday evening, May 27, 2015.
Bambang explained that the PTKP needs to raised because the majority of minimum pay in provinces across Indonesia has approached the Rp 3 million mark per month - which means that a large number of Indonesians earn almost Rp 36 million per year.
"Without a corresponding increase in PTKP threshold, these people will be subject to taxation, which harms their purchasing power," said Bambang.
Once DPR passes the amendment, the new threshold could come into effect later on in the year, said Bambang. Although the new threshold could mean lower revenues for the state from taxes, it would be balanced out by the revenues generated from consumption.
The Head of DPR's Commission XI, Fadel Muhammad, has welcomed the plan, and said that it would definitely increase the public's consumption capacity.
"This will definitely be beneficial for the general public. However, we would need to hash out the finer details before proceeding to pass the amendment," said Fadel.
It is known that PTKP was last revised in January 2013, when the threshold was raised from Rp 15.8 million to Rp 24.3 million per year. The amendment is known to have boosted Indonesia's economic growth by 0.08 percent.
As such, the government is seriously considering another revision, especially since Indonesia's economic growth has slowed - only reaching 4.71 percent in the first trimester of 2015.
A taxation expert, Darussalam, has also welcomed the government's plan to revise PTKP to reflect the economic realities on the ground - including inflation, and the rising cost of living. "Not only will this benefit the public, it will also increase the government's income from the revenues generated through consumption," he said.
ANTARANEWS
