House seeks even lower tax rates<\/p>\n
JAKARTA (JP): The House of Representatives (DPR) yesterday
\nreached a provisional agreement to make changes in the
\ngovernment-sponsored tax bills, including slashing the range of
\nproposed income tax rates and raising the range of sales tax
\ntariffs.<\/p>\n
Novyan Kamal, chairman of the special committee assigned by
\nthe DPR to deliberate on the tax bills, said the changes will be
\nbrought to a plenary meeting in the next two weeks for final
\napproval.<\/p>\n
He said that the income tax rates will change to 10 percent
\nfor the income bracket of up to Rp 25 million (US$11,500), 15
\npercent for income of Rp 25 million to Rp 50 million and 30
\npercent for income of above Rp 50 million.<\/p>\n
Novyan described the changes in the tariff range as a new
\nbreakthrough for the House, which is often branded as merely a
\nrubberstamp body.<\/p>\n
"The changes are important to improve the fairness and to make
\nthe country's business climate more attractive," he told
\nreporters following the completion of 10 days of marathon talks
\namong the task forces set up by the committee.<\/p>\n
The special committee, established early last month to
\ndeliberate on the government's four tax bills, has set up four
\ntask forces to speed up the deliberation process of the bills so
\nthat the new laws can be implemented in January next year.<\/p>\n
The government's proposed income tax rates are set at 10
\npercent for the income level of up to Rp 25 million, 15 percent
\nfor the income of Rp 25 million to Rp 50 million, 20 percent for
\nthe income of Rp 50 million to Rp 75 million and 30 percent for
\nincome level of above Rp 75 million.<\/p>\n
Collection<\/p>\n
Novyan said that the four rates proposed by the government
\nwere slashed to three to simplify tax collection and monitoring.<\/p>\n
The income tax rates, under the present law, are set at 15
\npercent for the income level of up to Rp 10 million, 25 percent
\nfor between Rp 10 million and Rp 50 million, and 35 percent for
\nthe bracket of above Rp 50 million.<\/p>\n
Novyan said the new tax income rates, which will be further
\ndeliberated by the special committee before being taken to the
\nHouse's plenary session for final approval, do not only reflect
\nmore fairness but also more competitiveness in attracting foreign
\ninvestment.<\/p>\n
The House also revised the government's proposal to maintain
\nthe rates of the sales tax for luxurious goods at between 10
\npercent and 35 percent to a higher range of between 10 percent
\nand 50 percent.<\/p>\n
Ben Messakh, which headed the task force for the sales tax
\nbill, said the higher rate will curb people's spending for luxury
\ngoods.<\/p>\n
He added that it will also lower the consumptive spending of
\nthe middle income taxpayers, who will benefit from the
\nsignificant reduction in income tax rates. (hen)<\/p>",
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