Government plans to raise taxes paid by affluent

Government plans to raise taxes paid by affluent

JAKARTA (JP): The government plans to raise income tax rates
for large individual taxpayers in a bid to increase state
revenues from the tax sector, a senior tax official said on
Tuesday.

Anshari Ritonga, the director general of tax at the Ministry
of Finance, said the existing tax bracket, which sets income tax
rates between 10 percent to 30 percent for individual taxpayers,
only benefited the rich.

"The change will be part of the planned amendment of the Law
on Income Tax," he told a business luncheon organized by the
Association of Indonesian Accountants.

According to the existing law, the income tax rate for
individuals with an annual income of less than Rp 25 million
(US$3,400) is 10 percent. The income tax rate for people with an
annual income between Rp 25 million and Rp 50 million is 15
percent, while those with an annual income of over Rp 50 million
is 30 percent.

Ritonga said that the amendment was needed so that the new law
would stipulate a higher tax bracket with rates ranging from 10
percent and 40 percent.

He declined, however, to elaborate about the planned change,
saying that new rate should be approved by the House of
Representatives (DPR).

Ritonga also said the government was committed to continuing
its efforts to eliminate tax waiver facilities that reduced the
tax base significantly, but the benefits of which were not felt
by the country's economy.

"Some of those tax waivers are not beyond the existing law,
but they breach the principle of justice," he said.

He said a team preparing the comprehensive revision of unfair
tax laws was now working on it and would report the results next
year. (udi)