Plans to Impose High Tax for the 'Super Rich' Met with Criticism

TEMPO.CO, Jakarta - Public policy expert and Narasi Institute director, Achmad Nur Hidayat, criticized the government’s plan to increase tax for the wealthy up to 35 percent which was initially mentioned by Finance Minister Sri Mulyani. 

Sri Mulyani talked about this tax plan in a meeting with the House of Representatives (DPR) on Monday, May 24, where the minister said it will increase the individual income tax or PPH OP as a form of tax reform.

“We will impose changes on the PPH OP tariff and bracket. The high wealth individuals will not see too significant a rise, only from 30 to 35 percent,” said Sri Mulyani.

Hidayat argues that sending out a message that implies the government profusely taxes the super rich with sky high taxes will actually create an investment climate that is not attractive. 

“The Job Creation Law (UU Cipta Kerja) which intends to attract investment could end up being non-beneficial if the government continues to hunt taxes from the middle-class and the wealthy,” Achmad wrote in a statement on Tuesday, May 25.

Sri Mulyani assures that this upcoming tax policy will only affect those with annual incomes up to Rp5 billion, and stated that they comprise a small group of people in the country. 

However, Hidayat believes this idea of ‘hunting’ the taxes of super rich individuals comes from the IMF and OECD which aims to fund a country’s handling of the Covid-19 pandemic. He thinks this scheme will be compatible in developed countries.

Read: Sri Mulyani to Increase Tax for Rich Indonesians to 35%

FAJAR PEBRIANTO