Calculation of ITA 21 with Effective Rates, Starting in January 2024

JAKARTA. Calculation of Income Tax Article (ITA) 21 uses a new calculation formula, based on the average effective tax rate (TER), which is guaranteed to apply from the January 2024 tax period. 

Previously, the use of the TER formula in calculating ITA 21 was stated in Law Number 7 of 2021 on Harmonization of Tax Regulations (HPP Law).

Quoting CNBCIndonesia.com, to implement this provision, the government has prepared a Minister of Finance Regulation (PMK) which will be issued soon.

So later, in calculating the amount of ITA 21 payable, taxpayers simply need to multiply the TER amount by the gross income for each tax period, excluding the last tax period.

Becoming Simpler

The amount of TER will be determined in the PMK, which takes into account the non-taxable income (PTKP) of each taxpayer according to their status, which includes not married, married, and married to a working partner along with the number of dependents they have or do not have.

While quoting Kontan.co.id, Director General of Taxes Suryo Utomo said that by using TER, the tax deduction process will be easier and simpler.

Apart from that, he guarantees that calculating ITA 21 with TER will not result in underpayment or overpayment. "So the amount paid is really no different from the current conditions," said Suryo.

The use of TER does not only apply to withholding ITA 21 for employees. However, it is also included in the calculation of ITA 21 for non-employees. (ASP/KEN)