HPP Law Becomes the Government's Backbone to Close Loop Holes in The 2023 Tax Revenue

JAKARTA. The government is optimistic that the implementation of Law (UU) Number 11 of 2021 on the Harmonization of Tax Regulations (HPP), can close loopholes in achieving the 2023 tax revenue target.

Meanwhile, the tax target set by the government in the 2023 State Revenue and Expenditure Budget Draft (RAPBN) is IDR 1,715 trillion. That number is up 6.7% from the outlook for the realization of tax revenues in 2022.

In the Financial Note and the 2023 State Revenue and Expenditure Budget Draft, the government states that the HPP Law can answer tax challenges due to the development of digital-based business activities.

In addition, the government is also optimistic that the HPP Law can improve compliance and encourage voluntary compliance, strengthen the administrative system of supervision and tax collection and provide legal certainty.

One of them is through the use of a Single Identity Number (NIK) as the identity of an individual taxpayer who has been using the Tax ID Number (NPWP) format.

In general, in the tax revenue target for the 2023 State Revenue and Expenditure Budget Draft consists of oil and gas income tax (PPh) revenues of IDR 61.4 trillion and Non-Oil and Gas income tax of IDR 873.6 trillion.

In addition, the revenue target for Value Added Tax (VAT) and Sales Tax on Luxury Goods (STLG) is IDR 740.1 trillion. Then for the revenue from Land and Building Tax and other taxes, it is targeted at IDR 40 trillion.

Apart from relying on the implementation of the HPP Law, the government also said that the target for tax revenue will be driven by developments in commodity prices, economic recovery and increased domestic consumption.