The Government Officially Reduces Income Tax Rates

By Editorial Team 20/05/2020
Tax system
Topic

The government again provides tax incentives for the private sector. Through the Director General (Perdirjen) Tax Regulation No. PER-8/PJ/2020 on Calculation of Income Tax Installments with Tariff Adjustments for Corporate Taxpayers, the government officially reduces the corporate income tax (PPh).

There are two tariff reduction incentives. First, a general income tax reduction for all corporate taxpayers. The original tax rate of 25 percent was lowered to 22 percent for 2020 and 2021. In 2022, the tax rate will be reduced again to 20 percent.

Second, a reduction in tax rates for public companies whose shares are traded on the Indonesia Stock Exchange (IDX). The requirement is that the portion of shares traded on the stock exchange be at least 40 percent of the total shares of the company. They will enjoy three percent lower tariffs. So, these companies will enjoy 19 percent income tax rates in 2020 and 2021 and 17 percent in 2022.

Register now and get free access.

If you want to get free access to our Daily Insights and Weekly Digest, please click "Sign up" button below. If you already have an account, please login.

Sign up
Log in
What do subscribers receive?

As a subscriber, you'll receive daily insights, weekly business digests, and quarterly industrial reports.

What kind of pieces will i get?

In-depth reports on assumption and impact analysis, as well as update and trends mapping, written by our credible and experienced analysts.

And, there is something else…

Register now and get free access, click here to register. Feel free to contact us with any additional questions you have.