Economically, taxation should not decrease social welfare, hamper any effort for life improvement, or even hinder production and distribution flow for public basic needs of goods and services. Ideally, Invidual Income Tax should consider the personal condition of the Taxpayer (e.g. family and dependents). Tax imposition based on the financial capability should exclude the part of outcome to be spent for the minimum basic need fulfillment.
Therefore, for the Individual Resident Taxpayer(s), in calculating Taxable Income, the income shall firstly be deducted with PTKP. Below is the current PTKP amount based on Law No. 36 Year 2008 and the new one based on the amendment to the Law under the Minister of Finance (MoF) Regulation No. 162/PMK.011/2012:
| Effective Date | Remarks | |||
| Jan 2009 - Dec 2012 | Jan 2013 - Subsequent Years | |||
| IDR | 15,840,000 | IDR | 24,300,000 | For Individual Taxpayer |
| 1,320,000 | 2,025,000 | Addition for Married Taxpayer | ||
| 15,840,000 | 24,300,000 | Addition for a wife in which the income is combined with the income of the husband | ||
| 1,320,000 | 2,025,000 | Addition for every member of family either from the same blood or by marriage in one straight descent line and or one first degree sideways, who becomes a full dependent, at maximum 3 (three) dependents for one family. | ||
In detail, starting from 1 January 2013, PTKP based on Taxpayers’ marital status will be as follows:
| Status PTKP | PTKP Amount (IDR) | Details |
| TK/0 or S/O | 24,300,000 | Not Married, with no Dependent |
| K/0 or M/O | 26,325,000 | Married with no Dependent |
| K/1 or M/1 | 28,350,000 | Married with 1 (one) Dependent |
| K/2 or M/2 | 30,375,000 | Married with 2 (two) Dependents |
| K/3 or M/3 | 32,400,000 | Married with 3 (three) Dependents |
For Income Tax Article 21 calculation, the maximum PTKP amount will be IDR 32,400,000, and for Individual Income Tax, the maximum PTKP amount will be IDR 56,700,000 for the Taxpayer with marital status having the wife with an income combined to the husband’s (K/I/3).
Those defined as the family from the same blood in one straight descent line and or one first degree sideways are the grandparents and the above, and the grandchild and the lower. And, those defined as the family from marriage in one straight descent line and or one first degree sideways are the parents in law and step children. Those defined as the family who become the full burden are family members who do not have any income and their living costs are fully borne by the Taxpayer.
When selecting which PTKP to be applied, the condition at the beginning tax year (1 January) is the determining factor. For example, in 1 January 2013, Taxpayer B has the status of ‘marriage with 1 (one) child as dependent’. In case the second child is born after 1 January 2013, the amount of PTKP given to the Taxpayer B for tax year 2013 is still calculated referring to the status ‘marriage with 1 (one) child as dependent’.
Back to the questions at the beginning of this article, PTKP increment could be insignificant, because it is only 53.41%. However, it is worth using in calculating the ITA 21 and the Annual Individual Income Tax. How to do that? For ITA 21, the new PTKP can be used starting from Monthly Return for January 2013. For the Annual Individual Income Tax, especially for the Individual Taxpayers mandatory to pay the ITA 25 installment for the following year, it may is used for the calculation of ITA 25 installment for the FY 2013—but for the ‘Income Tax payable’ FY 2012, the old PTKP is still used.
