Jakarta, CNN Indonesia – The Law on Harmonization of Tax Regulations (UU HPP) has been ratified by the DPR together with the government some time ago. This HPP Law comprehensively regulates the adjustment of various existing tax policies.
The Directorate General of Taxes at the Ministry of Finance explained that to promote sustainable economic growth and support the acceleration of economic recovery, a fiscal consolidation strategy is needed that focuses on improving the budget deficit and increasing the tax ratio. This strategy is carried out through the HPP Law with various new policies related to taxation.
“One of the policies discussed in the law is the Corporate Income Tax (PPh). Starting from the 2022 fiscal year onwards, the corporate income tax rate is 22 percent,” wrote the DGT in a written statement, Wednesday (13/10).
This decision was taken by comparing the average corporate income tax rates in OECD countries, Europe, America, the UK, G-20, and ASEAN.
In American countries, the average applicable corporate income tax rate is 27.16 percent. Meanwhile in European countries, the average corporate income tax rate is 18.98 percent.
The determination of the corporate income tax rate in Indonesia at 22 percent is still reasonable and lower than the average corporate income tax rate for ASEAN countries of 22.17 percent and OECD member countries of 22.81 percent. The determination of the corporate income tax rate is expected to be able to optimize state revenues and increase taxpayer voluntary compliance. This is also in line with the trend of global taxation which has begun to increase the contribution of corporate tax revenues, while maintaining the investment climate in Indonesia.