Prabowo Promises to Cut Income Tax rates by 5 to 8 percent
Fokus Pos. Pair number presidential and vice presidential candidate 02 Prabowo Subianto and Sandiaga Uno promised to cut personal and agency income tax rates (PPh) by 5 to 8 percent of the current tariff if elected in the presidential election. At present, corporate income tax rates are 25 percent, while personal PPh rates range from 5-30 percent.
This was revealed by the Economic Team, Research, and Development of the National Winning Body (BPN) Harryadin Mahardika in Foreign Media Briefing at Prabowo-Sandi Media Center, Jakarta (Friday 11/1).
"The purpose of tax cuts is basically we want to provide stimulus to the economy," Harryadin said.
According to Harryadin, by cutting taxes, the allocation of people's income will increase so consumption can be eroded. Meanwhile, companies can use this income for investment so they can create jobs.
Tax cuts are also claimed to have an impact on the psychology of tax compliance. Thus, the loss of tax revenue can be compensated by the increase in mandatory compliance so that it can increase the tax ratio to Gross Domestic Product (GDP).
The risk of bribery or 'hanky panky' between taxpayers and tax officers to get lower tax obligations can also decrease given the nominal tax paid has also dropped.
Harryadin detailed, the economic impact of the PPh cut policy for the short term could hoist the economy by 0.3 - 0.7 percent per year. Then, for the long term, GDP will also increase 0.2 - 0.4 percent per year.
In addition, this policy can also increase the tax ratio to Gross Domestic Product (GDP) by 0.5 to 1 percent per year. During this time, based on Directorate General of Tax data, the Indonesian tax ratio trend is down and stuck around 11 percent.
Not only that, this policy is also expected to increase employment 1 - 1.5 percent per year.
"For an investment company, he will definitely need more people and employees so that employment opportunities will increase," he said.
Harryadin realized that just cutting taxes would not be enough to ensure the desired impact was achieved. Therefore, in addition to tax cuts, the team also proposed to improve the tax infrastructure. One policy according to Harryadin was late carried out by the Government Cabinet Joko Widodo.
For the record, Jokowi has issued Presidential Regulation Number 40 of 2018 concerning Renewal of Core Tax System or renewal of core taxation systems.
"It's late. If he wants to. It should be done in front. If we don't. We will invest from the beginning," he said.
Separately, Executive Director of the Center for Indonesia Taxation Analysis (CITA) Justin Prastowo said that tax cuts are a logical consequence of the completion of the tax amnesty which is expected to increase compliance.
However, Yustinus reminded that there must be prerequisites fulfilled in order to reduce the tax rate to have a positive impact on revenue and investment. In this case, the expansion of the tax base, reliability of the administrative system, and awareness of taxpayers to pay taxes. External factors such as economic conditions also need to be considered.
"That is, the downward rate is not a single factor," Yustinus said.
In 2010, Indonesia had lowered corporate income tax rates from 30 percent to 25 percent but the tax ratio from 2008 to 2010 actually dropped from 13 to 10.9 percent. for the record, at that time, still affected by the global economic crisis.
"We have had experience, rates dropped, tax ratios and revenues were stagnant," he explained
Yustinus proposed a reduction in income tax rates can be done in stages. For example, for corporate income tax, the current tariff can be evaluated at 25 percent to 22 percent over the past two years. After that, if the results are positive, only 17 to 18 percent. This is done to maintain state budget revenues.
"So that (the pocket of the state) is not broken. Because if the tax rate once goes down, it almost certainly cannot go up," he explained.
This was revealed by the Economic Team, Research, and Development of the National Winning Body (BPN) Harryadin Mahardika in Foreign Media Briefing at Prabowo-Sandi Media Center, Jakarta (Friday 11/1).
"The purpose of tax cuts is basically we want to provide stimulus to the economy," Harryadin said.
According to Harryadin, by cutting taxes, the allocation of people's income will increase so consumption can be eroded. Meanwhile, companies can use this income for investment so they can create jobs.
Tax cuts are also claimed to have an impact on the psychology of tax compliance. Thus, the loss of tax revenue can be compensated by the increase in mandatory compliance so that it can increase the tax ratio to Gross Domestic Product (GDP).
The risk of bribery or 'hanky panky' between taxpayers and tax officers to get lower tax obligations can also decrease given the nominal tax paid has also dropped.
Harryadin detailed, the economic impact of the PPh cut policy for the short term could hoist the economy by 0.3 - 0.7 percent per year. Then, for the long term, GDP will also increase 0.2 - 0.4 percent per year.
In addition, this policy can also increase the tax ratio to Gross Domestic Product (GDP) by 0.5 to 1 percent per year. During this time, based on Directorate General of Tax data, the Indonesian tax ratio trend is down and stuck around 11 percent.
Not only that, this policy is also expected to increase employment 1 - 1.5 percent per year.
"For an investment company, he will definitely need more people and employees so that employment opportunities will increase," he said.
Harryadin realized that just cutting taxes would not be enough to ensure the desired impact was achieved. Therefore, in addition to tax cuts, the team also proposed to improve the tax infrastructure. One policy according to Harryadin was late carried out by the Government Cabinet Joko Widodo.
For the record, Jokowi has issued Presidential Regulation Number 40 of 2018 concerning Renewal of Core Tax System or renewal of core taxation systems.
"It's late. If he wants to. It should be done in front. If we don't. We will invest from the beginning," he said.
Separately, Executive Director of the Center for Indonesia Taxation Analysis (CITA) Justin Prastowo said that tax cuts are a logical consequence of the completion of the tax amnesty which is expected to increase compliance.
However, Yustinus reminded that there must be prerequisites fulfilled in order to reduce the tax rate to have a positive impact on revenue and investment. In this case, the expansion of the tax base, reliability of the administrative system, and awareness of taxpayers to pay taxes. External factors such as economic conditions also need to be considered.
"That is, the downward rate is not a single factor," Yustinus said.
In 2010, Indonesia had lowered corporate income tax rates from 30 percent to 25 percent but the tax ratio from 2008 to 2010 actually dropped from 13 to 10.9 percent. for the record, at that time, still affected by the global economic crisis.
"We have had experience, rates dropped, tax ratios and revenues were stagnant," he explained
Yustinus proposed a reduction in income tax rates can be done in stages. For example, for corporate income tax, the current tariff can be evaluated at 25 percent to 22 percent over the past two years. After that, if the results are positive, only 17 to 18 percent. This is done to maintain state budget revenues.
"So that (the pocket of the state) is not broken. Because if the tax rate once goes down, it almost certainly cannot go up," he explained.
Komentar
Posting Komentar