DGT Prepares Calculation Tool for ITA 21 Based on ETR

JAKARTA. The Directorate General of Taxes (DGT) will prepare a tool to calculate Income Tax Article (ITA) 21 using the effective tax rate (ETR) which was previously stipulated in Government Regulation (PP) Number 58 of 2023.

The mechanism for calculating ITA 21 using ETR is an alternative way to calculate ITA 21 other than what has been used so far, namely referring to Article 17 of the Income Tax Law (UU).

In calculating using ETR, taxpayers only need to multiply the gross income value by the effective tax rate that has been determined. The ETR determined has taken into account non-taxable income.

Read: Effective 1 January 2024, Regulation on the Use of Effective Rates of ITA 21 Released

In contrast to the calculation of ITA 21 by referring to Article 17 of the Income Tax Law, taxpayers must deduct the income received with expenses such as position allowance and pension allowance, pension contributions, and non-taxable income.

In its written statement, the DGT also emphasized that the use of ETR will not add new tax burdens.

In general, the method of calculating ITA 21 with ETR is divided into two categories. First, the monthly ETR category applied to income received by Individual Taxpayers in one tax period, except the last tax period (December).  

Second, the daily ETR category is applied to the income received by Non-Permanent Employees on a daily, weekly, unit, or piece rate basis.  

Details, regarding the provisions for calculating ITA 21 using details of PP 58 for the Year 2023, can be seen in the Regulation Update entitled, Regulation on the Use of Effective Rates of ITA 21 Released. (ASP/KEN)