CHANGES PROPOSED IN OMNIBUS TAX LAW
- December 3, 2019
- Posted by: Administrator
- Category: Tax News
President Joko ‘Jokowi’ Widodo has mentioned a plan to introduce an omnibus tax law, the first in the country, to accelerate the reform program. The Omnibus Law consists of six group of issues: Income Tax, VAT, General Provisions and Procedures, Regional Taxes, Regional User Charges, and other affected Laws. Introducing an omnibus law will indeed be the most effective and fastest way of resolving all the problems caused by the many contradictory and overlapping laws and regulations that have to date hindered the reform program. Finance Minister Sri Mulyani issued a press release on Tuesday, 26 November 2019 regarding the changes proposed in the Omnibus Tax Law for deliberation by the House of Representatives (DPR RI). Below are the major proposed changes.
|No.||Proposed Change||Prevailing Provisions|
|1.||Corporate Tax Rate
Single Corporate Tax Rate reduced to 22% and 20%: 22% for 2021-2022 and 20% in 2023.
Additional 3% deduction, from 22% to 19% for listed companies that have just gone public within the past 5 years.
20% normal rate reduced to 17% for corporations that are newly listed in 2023.
|25% for regular Corporate Taxpayers and 20% for qualified public companies.|
|3.||Tax Base For Expatriate Indonesian Tax Resident
Territorial basis for certain overseas income for foreigners that are Indonesia Tax residents.
|World-wide income basis so that all income sourced both from Indonesia and from abroad is taxable in Indonesia.|
|6.||Tax On E- Commerce
Foreign taxpayers that are not present in Indonesia or operating in Indonesia, but are generating income from business activities in Indonesia, are required to collect VAT on such income.
|Has not been regulated.|
Tax holiday can be given to: Pioneer Industries or Companies doing business in specific areas or specific industrial areas.
|Is given only to Pioneer industries|