35% will be taxed, how many Indonesian people have an income of IDR 416 million/month?

Jakarta –

The government will increase the tax for the rich in Indonesia. The government plans to increase the PPh rate for Individual Taxpayers (WP OP) by 35% for taxable income above IDR 5 billion per year or around IDR 416 million per month.

Minister of Finance (Menkeu) Sri Mulyani Indrawati announced directly during a working meeting (raker) with Commission XI of the DPR RI, Monday (28/6). He explained that in the last five years only 1.42% of the total individual taxpayers made payments at the highest rate, namely 30%.

In response to this, according to Managing Director of Political Economy and Policy Studies (PEPS) Anthony Budiawan, people with an income of IDR 5 billion or IDR 416 million per month are few in Indonesia.

“If you want to tax the rich, don’t charge Rp 5 billion a year, it should be lower than that, if Rp 5 billion a year, how many people will be taxed and there are? Let’s just count how many people in the bank earn Rp 5 billion that, that’s a little. Only a handful of people,” he said, to detik.com, Tuesday (26/6/2021).

He also suggested that if the government wanted to tax the rich, it could impose a dividend tax. According to him, rich people who are really rich are company owners, who get their money from the distribution of dividends.

“If you want to be serious, not those with income of Rp 5 billion and above, dividend tax, because rich people who are really rich people are owners of companies, who get most of their money from dividend distributions, who currently only pay 10% tax,” he explained.

In addition, the tax of the rich, which was previously 30%, was already quite high compared to neighboring countries. He also said that the tax was bigger than Singapore, Malaysia and Thailand.

“If this 30% is already high, if it is increased to 35% it will be meaningless, because 30% is much higher than neighboring countries. This is just a playful policy. Compared to other countries, we are already quite high. We are taller. from Singapore is higher than Malaysia is higher than Thailand,” he said.

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