Formal Tax Compliance of Non-Employee Individuals is Only 34%
Tuesday, 24 October 2023
JAKARTA. The Directorate General of Taxes (DGT) stated that the formal compliance rate of non-employee individual taxpayers was only 34.09%. Formal compliance is measured by the number of taxpayers who submit tax returns.
Quoting Kontan.co.id, the trend of formal compliance of non-employee taxpayers is decreasing. In 2021, for example, the formal compliance ratio was 45.53%, lower than 2020 which was 52.44%.
As of 18 October 2023, the number of non-employee individual taxpayers was only 1.5 million annual tax returns. Meanwhile, the number of non-employee individual taxpayers required to submit Annual Tax Returns is 4.4 million.
According to the DGT, one of the reasons for the low formal compliance of non-employee individual taxpayers is because it is dominated by Micro, Small and Medium Enterprises (MSMEs) taxpayers with a revenue below IDR 500 million.
For information, taxpayers who have revenue below IDR 500 million in a year are indeed exempted from the obligation to pay taxes on their income.
However, they still have to submit their annual tax return. For this reason, the tax authority admits that it needs to educate MSME players to fulfil the obligation to submit their annual tax return.
Meanwhile, overall the DGT has received 14.59 million taxpayers' annual tax returns.(ASP/KEN)
