JAKARTA. The government targets income tax (PPh) revenues in 2022 to reach IDR 680.9 trillion or a growth of 10.7% compared to the outlook for income tax revenues in 2020 which amounted to IDR 615.2 trillion.
As usual, income tax revenue is dominated by Non-Oil and Gas Income Tax, which is targeted at IDR 633.56 trillion or grows 11.3% from the 2021 projection. Meanwhile, oil and gas income tax revenue amounts to IDR 47,313.5 or grows only 3.4% from the projection in 2021.
In the Financial Note or the 2022 State Budget (RAPBN) it is explained that there are a number of reasons underlying the non-oil and gas income tax growth target. One of them is because the government is confident that Indonesia's economic condition will improve.
The Trend of Income Tax (in IDR trillion)
However, in general, there are several things that become the basis for setting the target for income tax revenue in 2022.
1. The Increase in the Number of Individual Taxpayers
In recent years, the number of individual taxpayers, or individuals who have a Taxpayer Identification Number (NPWP) has continued to rise. This will also increase the total tax base for individual income tax.
The Trend of Number of Registered Taxpayers (In million)
This trend is expected to continue, along with the government's efforts in implementing tax reform. Several aspects of tax reform that will be carried out include the fields of organization, human resources, information technology and databases, business processes and tax regulations.
2. The Increase in Taxpayer Voluntary Compliance
Taxpayer compliance is one of the factors that generate better tax revenue. To that end, the government made a number of improvements in user-friendly IT-based business processes.
Improvements will be made by strengthening digital services, with a focus on online services, or through telephone and non-telephone lines. Related to this, the government will maximize the 3C program, namely Click, Call, Counter. Thus, it will be easier for taxpayers to carry out their tax obligations.
3. Territorial-Based Supervision
To expand the reach of taxpayers, the tax authorities will also carry out extensification and territorial-based supervision.
This is in line with the increase in the number of Medium Tax Office (KPP) by 18 to 38 Medium Tax Offices in 2021.
4. The Provision of Tax Incentives
In addition to focusing on individual taxpayers, the government is also trying to increase income tax revenue for corporate taxpayers. One way that will be done is to continue providing tax incentives.
Some of the tax incentives that have been provided throughout 2020 and 2021 include:
- Income Tax Article (ITA) 21 is borne by the government
- Exemption of ITA 22 on import
- Reduction of ITA 25 installments
- Acceleration of VAT refunds
- Reduction in corporate income tax rates
- MSME Final Income Tax is borne by the government
- Non-collected VAT for entrepreneurs in bonded zones and recipients of KITE facilities
- Import duty is borne by the government
- Sales Tax on Luxury Goods (STLG) borne by the government for motor vehicles
- VAT is borne by the government for landed houses and apartments
- VAT on store rent payment
- Final income tax for the Acceleration Program for Irrigation Water Use Improvement (P3-TGAI).
5. Income Tax Rate Reduction
Apart from the factors that drive income tax revenues, in 2022 the government will again reduce the corporate income tax rate to 20%. The reduction is the impact of the policies regulated in Law Number 2 of 2020.