Indonesia aims to tax rich more to finance large pandemic deficit

Writer: Vincent Fabian Thomas

While struggling to finance a deficit budget to pull the country through a health crisis and economic recession due to the pandemic, Indonesia is seeking to increase taxes on high-income individuals and families.

Through an amendment to Law No. 6/1983 on general provisions and tax procedures (KUP), the government is proposing a higher rate of personal income tax targeting people with earnings of at least Rp 5 billion (US$351,500) a year. These people are also known as high-net-worth individuals (HNWIs). The proposal goes along with other increases in value-added tax, a new carbon tax and another proposal for tax amnesty.

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