Indonesian Govt Slashes

INCOME TAX ON SMES BY 50%

JAKARTA, July 14 Asia Pulse - The Indonesian House of Representatives (DPR) and the government have agreed to reduce income tax tariff by 50 per cent of normal tariffs for small and medium micro businesses which have legal entities.

The reduced income tax tariff was given to taxpayers with a business turnover of Rp4.8 billion (US$528,000) to Rp50 billion per annum, Drajat Wibowo, member of the House's working committee on income tax bill, said at the weekend.

Citing an example, he said, if a resident taxpayer had a business turnover of Rp5 billion and posted a net profit of Rp500 million, his/her income totaling Rp480 million would be subject to a 14 per cent income tax tariff.

Meanwhile, the remaining Rp20 million would be subject to a 28 per cent normal tariff, he said.

If the small and medium macro entrepreneurs had no legal entities, they would be treated as individual taxpayers and subject to progressive tariff accordingly, he said.

Under the new agreement, the bigger the business turnover of small and medium macro entrepreneurs the smaller the proportion of incentives or facilities to income tax without incentives would be, he said.

He further said the House and the government also agreed to reduce income tax tariff by 5 per cent of normal tariffs for publicly-listed companies which sell at least 48 per cent of their shares in the Indonesia stock exchange.

(ANTARA)

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