TABLE OF CONTENT

CHAPTER I ........................................................................................................................................ 2
INTRODUCTION .............................................................................................................................. 2
I. Backgrounds ............................................................................................................................ 2
II. Problem Formulation ............................................................................................................. 2
III. Purpose of The Paper ............................................................................................................. 3
CHAPTER II....................................................................................................................................... 4
DISCUSSION ...................................................................................................................................... 4
I. The Changes of PP 46/2013 to PP 23/2018 ............................................................................ 4
II. The Impact of PP 23/2018 in 2025 to The Taxpayers ........................................................... 5
CHAPTER III ..................................................................................................................................... 7
CONCLUSION ................................................................................................................................... 7
I. Conclusion ............................................................................................................................... 7
II. Suggestion ............................................................................................................................... 7
REFERENCES ................................................................................................................................... 8

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 CHAPTER I

INTRODUCTION

I. Backgrounds
Tax is a compulsory contributions collect by the government that imposes on
individual taxpayers and entity taxpayer whether they are local, regional or
federal. A government typically taxes individual and entity taxpayers to help pay
for public works and services as well as to construct and maintain national well-
being. These money that raised through taxes is utilized to improve the country’s
economy and the lives of everyone who lives in the country (Bandiyono & Utami,
2021).
There are 4 types of tax that are a contributor to state revenue which are
Income Tax (PPh), Value-Added Tax (PPN), Tax on The Sale of Luxury Goods
(PPnBM), and Property Tax (PBB). From the types of taxes mentioned above,
PPh is the biggest contributor in Indonesia. This brings the government continue
to develop Small and Medium Enterprises (SMEs) in Indonesia by changing PP
46/2013 to PP 23/2018 which have been implied since 1 July 2013.
In PP 46/2013, the tax rate is 1% which is final and the income tax is based
on business income for the SMEs taxpayers who have a specific gross turnover
receive or earn. While in PP 23/2018, the government provides a tax rate
reduction from 1% to 0.5% which is final for SMEs, taxpayers that have gross
revenues under 4,800,000,000 in one tax year. Due to the regulation of PP
23/2018, the taxpayers who have a specific gross turnover will be easy to
calculate their income tax.
It is expected that the implementation of these regulations will increase
public involvement in fulfilling their tax duties. But somehow, this regulations
have the disadvantages. So, this paper so that the writing of this paper aims to
review whether the enactment of PP 23/2018 is suitable or not for 2025 later on.

II. Problem Formulation

This paper will discuss about the following matters:
1. Why did the government change government regulations from PP 46/2013 to
PP 23/2018?

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 2. What is the impact of PP 46/2013 to the individual and entity taxpayers if the
regulations is utilized in 2025?

III. Purpose of The Paper

The purpose of writing this paper is as follows:
1. To find out why the government changed PP 46/2013 to PP 23/2018.
2. To find out the impact of PP 46/2013 to the individual and entity taxpayers if
the regulations is utilized in 2025.

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 CHAPTER II

DISCUSSION

I. The Changes of PP 46/2013 to PP 23/2018

Government regulation (PP) have been a source of concern for many
economic sectors. Government regulation is the implementation of laws by the
government, supported by the enforcement of penalties, with the express purpose
of modifying the economic consists of individuals and corporation. The
implementation of law by the government tends to have the capacity to affect the
business. The purpose of making government regulations is to create social
justice for the welfare of society.
This Government Regulations No. 46 Year 2013 is made in purpose to make
tax administration simpler for taxpayers with a specific gross income. This
regulations have been implied since 1 July 2013 which governs about the income
tax is based on business income for the taxpayers who have a specific gross
turnover receive or earn and the tax rate is 1% which is final for Small and
Medium Enterprises (SMEs) taxpayers. The changes in PP 23/2018 are only on
the tax rate that decrease from 1% to 0.5% which is final.
Both regulations are based on PPh Article 4 Paragraph (2) because the tax
rate is final which cannot be used to reduce the amount of income tax due. The
phrase "final" denotes that there is just one withholding tax every tax period with
some considerations. This PP 23/2018 are implied since 1 July 2018 for the SMEs
Taxpayers who have gross income under RP. 4.800.000.000 in one tax year. The
purpose of the changes is intended to increase participation in economic activities
throughout the nation, to make it easier for taxpayers to fulfill their tax
obligations, promote greater justice, give taxpayers opportunities to support the
state, and raise awareness of the value of taxes.
Here are some important point stated in PP 23/2018 which are as follows
(Hairunnisa et al., 2021):
- The tax rate is 0.5% only for the taxpayers that have gross income under Rp.
4,8 Millions
- This regulations are only applied for individual entrepreneurs and entity
entrepreneurs.

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 - Tax rate imposition period:
1. Individual taxpayers : 7 years
2. Entity tax payers : 4 years
3. Limited liability company taxpayers : 3 years

II. The Impact of PP 23/2018 in 2025 to The Taxpayers

As it was mentioned before, the tax rate in PP 23/2018 are 0.5% which are
quite low for taxpayers. According to this regulations, taxpayers who have the
specific gross income may find it convenient to calculate, deposit, and report
their income tax obligations with surrounding income tax on business income
received or generated by the taxpayers (AM et al., 2021). Having a 0.5% rate
could result in a large loss in state tax but will increase the number of taxpayers.
This tax rate of 0.5% are only applied to several taxpayers such as individual
taxpayers, limited liabilities company (PT), limited partnerships (CV), cooperatives
and firms.
On the other hand, Small and Medium Enterprises (SMEs) businessman are
concerned about the imposition of a final tax of 0.5% based on Government
Regulation Number 23 Year 2018 because this tax imposition mechanism ignores
the circumstances of taxpayers. In addition to imposition, taxes are calculated based
on gross turnover, which is turnover without accounting for profit. So, based on
some SMEs, this final tax is quite unefficient. Entrepreneurs with high turnover
may not always have high net profits (Prakosa & Hidayatulloh, 2019). This
regulations force business owners to accurately anticipate how long their tax
responsibilities for income tax will last.
If PP 23/2018 are utilized in 2025, the taxpayers have the potential to avoid
paying taxes. They can divide their revenue among multiple other taxpayers by
creating subsidiaries. This is due to the fact that corporate taxpayers do not have
a single fiscal year, allowing newly constituted corporate taxpayers to use PP 23
of 2018. The taxpayer will be subject to tariffs under PP 23 of 2018 if their gross
income are near Rp. 4.800.000.000, then they will not be charged by the general
of tax 25%. With the formation of these subsidiaries, corporate taxpayers can

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paid less tax because they give some of their assets and liabilities to the new
business entity without commiting to the previous business.
Even though Limited Partnership (CV) is included in the taxpayer who can
use a tax rate of 0.5%, but in article 3 paragraph (2) it is stated that CV is an
exception for taxpayers to earn income from free work (Wijaya & Setiawan,
2021). So, it is recommended for taxpayers who intend to form a business entity
for the purpose of engaging in independent labor should establish Limited
Liability Company (PT) rather than a Limited Partnership Company (CV) or firm
to get the advantages of using the tax rate of PP 23/2018.
It is recommended for a company to provide meal allowances to the
employees so that the expenses incurred can be recorded as meal allowances
connected to PPh 21 and the cash given out by the company can be subtracted
from gross income without being subject to positive fiscal adjustments. Beside
that, it is recommended for the company to use “Prive” so that it can be deducted
from income as a business investment for SMEs. Hopefully, the implementation
of these regulations will encourage public engagement in fulfilling their tax
duties in 2025.
Even though tax avoidance is considered legal and in accordance with the tax
regulations, hence it can be detrimental to the states. As a result, the Directorate
General of Taxes must find a way to reduce the possibility of tax avoidance
through education, monitoring, and upgrade the regulations in 2025 because this
naturally has an impact on decreasing tax revenues. As it was mentioned above,
income tax is the large contributor to the tax revenue in order to increase people’s
welfare.

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 CHAPTER III

CONCLUSION

I. Conclusion
In conclusion, Government Regulation No. 23 Year 2018 have the
positive and negative relation in it. The positive relation I sthat the tax rate is low
which is 0.5%. But, this tax rate is only applied for individual taxpayers, Limited
Liability Company (PT), Limited Partnership (CV), firm and coorperations.
Beside that, this government regulation is based on PPh Article 4 Paragraph (2)
which is a final tax. This final tax is quite unfair for some taxpayers because taxes
are calculated based on gross turnover without accounting for profit. Though, not
all corporate taxpayers with high turnover may always have higher profits. This
regulations force business owners to accurately anticipate how long their tax
responsibilities for income tax will last.

II. Suggestion
Due to this Government Regulation No. 23 Year 2018, many taxpayers
seeks for tax avoidance in order to pay less tax. Eventhough this tax avoidance is
in accordance with the tax regulation and doesn’t violate the law, it is suggest
that in the upcoming year in 2025 the Directorate General of Tax find a way to
reduce tax avoidance made by the taxpayers because it is unfair for some tax
payers who paid tax in accordance with the regulations.

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 REFERENCES

AM, M. P., Nasaruddin, F., & Alam, S. (2021). Analisis Penerapan Pp 23 Tahun 2018 Pada
Wajib Pajak Umkm (Studi Di Kantor Pelayanan Pajak Pratama Makassar Utara).
Invoice : Jurnal Ilmu Akuntansi, 3(1), 44–53. https://doi.org/10.26618/inv.v3i1.4972

Bandiyono, A., & Utami, N. S. R. (2021). Evaluasi atas Implementasi PP Nomor 23 Tahun
2018 dan Implikasinya Terhadap Penerimaan Pajak dan Kepatuhan Wajib Pajak UMKM
di Banjarmasin. Journal of Applied Accounting and Taxation, 6(1), 37–51.
https://doi.org/10.30871/jaat.v6i1.2841

Hairunnisa, N. H., Burhan, I., & ... (2021). Implikasi Perubahan PP No 46 Tahun 2013 Ke PP
No 23 Tahun 2018 tentang Peredaran Bruto atas PPh Pasal 4 Ayat (2) pada UD
Rhaodatul. Jurnal Pabean …, 3(1), 35–48.
http://jurnal.politeknikbosowa.ac.id/index.php/pabean/article/view/87

Prakosa, P. B., & Hidayatulloh, A. (2019). Analisis Peraturan Pemerintah Nomor 23 Tahun
2018: Sudut Pandang Pelaku UMKM. Jurnal Akuntansi Dan Pajak, 20(1), 99.
https://doi.org/10.29040/jap.v20i1.553

Wijaya, S., & Setiawan, A. (2021). Potensi Tax Avoidance Terhadap Peraturan Pemerintah
Nomor 23 Tahun 2018 Oleh Wajib Pajak Perseroan Terbatas. Owner, 5(2), 407–416.
https://doi.org/10.33395/owner.v5i2.490