2022 State Budget: Fiscal Policy and Structural Reform
The Law on Harmonization of Tax Regulations (HPP Law)
As part of tax reform to increase revenue and achieve the long term sustainable growth
POLICY CHANGES IN THE HPP LAW
GENERAL PROVISIONS AND PROCEDURES
VAT
• Integration of the ID Number with the Taxpayer Number,
• Appointment of third parties as withholding, collecting, depositing
and/or reporting tax (including e-commerce)
•
•
Tax rate hike on VAT from 10% to 11% from 1 April 2022 and
to 12% by 2025,
reducing the VAT exemptions and facilities,
INCOME TAX
Introducing of the new bracket for individual with income
exceeding IDR 5 billion at 35% tax rate,
•
Corporate Income Tax in 2022 remains at 22%
•
Income Tax rate at 0.5% for individual MSME (threshold IDR
500 million)
Natura (Employee non-cash benefits) becomes tax object
CARBON TAX
Introduction of the carbon tax in 2022 through gradual basis
according to a roadmap that will consider the development of a
carbon market, achievement of NDC targets, sector readiness, and
economic conditions.
VOLUNTARY DISCLOSURE PROGRAM
Offering opportunity to pay the unpaid taxes for assets during 2015-
2020 with imposing tax fine rate. Will be implemented from 1 January
2022 to 30 June 2022
EXCISE
Strengthening the mechanism for determining excisable goods; and
Applying criminal sanctions as a last resort (ultimum remedium) in
excise crime for violations of permits, releasing excisable goods,
unpackaged excisable goods, excisable goods originating from
criminal acts, and the sale and purchase of excise stamps.
Source: Ministry of Finance
76View entire presentation