BERITA TERKINI
JAKARTA, DDTCNews - The government has assured that small traders will not be subject to taxation. This topic has sparked wide interest among netizens over the past week.
Starting next year, the government is set to step up supervision in 4 economic sectors deemed prone to high shadow economy activities. These sectors include retail trade, food and beverages, gold trading and fisheries.
The Directorate General of Taxes (DGT), however, underscored that the initiative does not target small traders. Instead, it is focused on expanding the tax base by bringing shadow economy activities into order.
“The regulation of the shadow economy is by no means intended not to burden small traders. Instead, it is aimed at ensuring fairness and sustaining national development,” the DGT asserted.
The DGT clarified that the shadow economy involves high-value economic activities that operate outside the official system–distinct from small-scale enterprises.
An example of the shadow economy is businesses with annual business turnover exceeding IDR500 million that remain unregistered in the tax authority system. Another example that falls squarely into this category is large-scale trading operations that fail to report their transactions to the tax authority.
The DGT also noted several major sectors have yet to be fully integrated into the tax administration system. These sectors, the DGT highlighted, are to be disciplined to ensure equity for both taxpayers and the state.
By intensifying oversight, the government seeks to distribute the tax burden more fairly, preventing compliant taxpayers from carrying it alone, and generate additional revenues that can be allocated to fund development programmes. At the same time, entrepreneurs stand to gain access to financing and legal protection.
The DGT concluded that efforts to curb the shadow economy are not intended to burden small traders. The DGT also assured that micro, small and medium enterprises (MSMEs or usaha skala mikro, kecil dan menengah/UMKM in Indonesian) will remain safeguarded.
“What the government seeks to regulate is the shadow economy–large-scale economic activities that are not part of the official system,” commented the DGT.
Beyond this issue, several other tax developments merit attention. Key highlights include the latest developments on the global minimum tax, strategies to boost the tax ratio, the implementation of the Pajak Bertutur programme and the clarification from the Ministry of Finance concerning government-borne Art. 21 Income Tax for officials.
The income inclusion rule (IIR) and domestic minimum top-up tax (DMTT) enacted by Indonesia through the Minister of Finance Regulation (MoF Reg.) 136/2024 have been officially recognised as qualified IIR and qualified DMTT (QDMTT).
The Organisation for Economic Co-operation and Development (OECD) announced the recognition in the Central Record of Legislation with Transitional Qualified Status. The designation is granted following a peer review conducted by Inclusive Framework member jurisdictions.
“The peer review process consists of a full legislative review and ongoing monitoring by the Inclusive Framework. The full legislative review assesses whether the legislation of an implementing jurisdiction achieves consistent outcomes with the GloBE Rules,” the OECD wrote.
DDTC Founder Darussalam outlined 3 major strategies to strengthen Indonesia's tax ratio, both in a narrow and broad sense. These strategies play a pivotal role amidst Indonesia’s stagnant tax ratio performance over the past decade.
What are the strategies in question? First, addressing 4 fundamental tax challenges. Second, mapping and correcting anomalies within the tax revenue structure. Third, plugging 5 major sources of tax leakage.
“If these three aspects are successfully managed, Indonesia’s tax ratio will rise,” Darussalam stated.
The Directorate General of Taxes (DGT) has once again launched Pajak Bertutur this year, adopting the theme of Tax Aware Young Generation for Advanced Indonesia.
Through the nationwide programme, the DGT seeks to engage students and the younger generation in understanding the role of taxes in Indonesia’s development. Instilling tax awareness of students as future taxpayers is one of the main pillars in shaping a tax-compliant society and actively contributing to national development.
“Building awareness of the importance of taxes from an early age is a strategic step that must be implemented continuously,” said DGT Director of Tax Dissemination, Services, and Public Relations Rosmauli.
The Ministry of Finance has categorised government-borne (ditanggung pemerintah/DTP in Indonesian) Art. 21 Income Tax for state officials as tax expenditure.
Government-borne Art. 21 Income Tax for state officials is classified as tax expenditure, considering that the scheme allows officials, who are in principle, taxpayers, to be exempt from the obligation to bear the income tax liability.
“Government-borne Art. 21 Income Tax is a deviation as taxpayers who are supposed to bear taxes no longer have the obligation as the liability is borne by the government,” reads the 2023 Tax Expenditure Report published by the Ministry of Finance.
The Ministry of Finance has identified approximately 5,000 constituent entities in Indonesia that fall under the scope of the global minimum tax.
Senior Policy Analyst of the Directorate General of Economic and Fiscal Strategy (Direktorat Strategi Ekonomi dan Fiskal/DJSEF in Indonesian) of the Ministry of Finance, Melani Dewi Astuti, stated that taxpayers constituting covered constituent entities are to administer the global minimum tax by filing tax returns related to GloBE.
“Approximately 5,000 constituent entities are covered. This implies that we will be receiving around 5,000 tax returns,” added Melani. (sap)
