Indonesian Tax Office Unveils New Rates for January 2024 with No Additional Burdens!

TAX-JAKARTA. The government has officially issued a regulation that serves as the basis for the use of effective rates in calculating income tax (PPh) Article 21.

This is stipulated in Government Regulation Number 58 of 2023 3 on the Withholding Tax Rate of Income Tax Article 21 on Income in Connection with Work, Services, or Activities of Individual Taxpayers signed by President Joko Widodo (Jokowi) on December 27, 2023. The regulation takes effect from January 1, 2024.

The Director of Guidance, Service, and Public Relations of the DJP, Dwi Astuti, explained that the purpose of issuing the regulation is to facilitate the calculation of tax payable.

"This convenience is reflected in the simplicity of the method of calculating tax payable," said Dwi in her official statement, Friday (29/12).

Previously, to determine the tax payable, employers had to deduct job costs, pension costs, pension contributions, and Non-Taxable Income (PTKP) from gross income. The result is then multiplied by the rate of Article 17 of the Income Tax Law.

“There is no additional new tax burden in connection with the application of the effective rate," she said.

Dwi said, the application of the monthly effective rate for Permanent Employees is only used in calculating PPh Article 21 for tax periods other than the Last Tax Period, while the calculation of PPh Article 21 for a year in the Last Tax Period still uses the rate of Article 17 paragraph (1) letter a of the Income Tax Law as the current provision.

Meanwhile, the DJP is preparing a tool that will assist in simplifying the calculation of PPh Article 21, which can be accessed through DJPOnline starting from January 2024.

"Furthermore, the government will regulate further provisions in the Minister of Finance Regulation which is currently in the final stage of preparation," concluded Dwi.