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Explainer: Key points from impending new tax law
A new tax law expected to be passed within days will revise provisions on individual as well as corporate income tax and value-added tax while also introducing a second tax amnesty, a carbon tax and the usage of ID numbers as taxpayer identification numbers.
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Finance Ministry Sri Mulyani Indrawati speaks at the House of Representatives on Sept. 13, 2021, discussing a draft bill on fiscal policy and another on taxation. (Finance Ministry/Public relation team)
T
he House of Representatives is expected to pass this week the harmonized taxation bill after an exceptionally short period of public discussion.
The bill includes changes to several provisions, which it is hoped will increase state revenue next year and thereby support the government’s pursuit of fiscal consolidation.
“The government is committed to achieving a sound state budget with a deficit below 3 percent [of GDP] by 2023. While aiming to spend better, the government must also optimize state revenue,” Finance Minister Sri Mulyani Indrawati said in a statement on Thursday.
The second draft of the bill, a copy of which was obtained by The Jakarta Post, is the latest piece of legislation based on an omnibus law structure, after the 2020 Job Creation Law, meaning a single new law has the authority to revise multiple prevailing laws.
The second draft overhauls most of the content of a first draft obtained by the Post in early June. The house only began its discussion of the bill on Sept. 13.
The following are some of the key points of the bill and changes from the first draft.
Corporate tax cut canceled
