Preview of Law on Harmonization of Tax Regulations

In early October 2021, the House of Representatives of the Republic of Indonesia ratified the Bill on Harmonization of Tax Regulations (HPP) as a Law. The main points of the Law are as follow:

  1. Single Identity Number (NIK) will become Tax ID Number (NPWP) for individual taxpayers;
  2. The imposition of tax on benefits in kind (BIK);
  3. The minimum tier of taxable income for individual income tax will be IDR 60 million, and individual taxpayers who have income above IDR 5 billion will be charged tax at a rate of 35%;
  4. The tax rate for Corporate Income Tax will be applied at 22%;
  5. The VAT rate changes to become 11%;
  6. Carbon Tax will be imposed for carbon emissions that harm the environment;
  7. Tax Amnesty.
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