Govt insists to free workers from tax despite potential losses
Despite the potential of losing state income from tax, the government has insisted to continue to implement the policy to exempt workers with monthly salary not more than Rp 2 million (US$218) from being subject of income tax.
In the policy dubbed by Manpower and Transmigration Minister Muhaimin Iskandar as “a gift” for the workers in the International Labor Day on May 1, the government plans to raise the ceiling of the non-taxable income (PTKP) to Rp 24 million from the current Rp 15.8 million per year.
Muhaimin admitted “the gift” was aimed at easing the planned massive rallies on May 1.
“The government hopes workers will remain working on that day to keep the productivity of the industries,” he said.
Home Minister Gamawan Fauzi acknowledged the policy had not been effective yet but said “has been principally approved.”
Gamawan said the government had never stopped paying attention for labor. “So in the May Day tomorrow no significant issues [will be raised],” he said.
Finance Minister Agus Martowardojo previously criticized the plan saying that the move could create an annual state loss of Rp 12 trillion in unrealized tax income.(dic/ued)