TAX EQUATION

1. The tax withholding rate for services provided by individuals without NPWP is 100%.
So, the company will withhold the entire payment of IDR 10,000,000 as tax. The
consultant will receive nothing.
2. For transactions involving goods, the withholding tax rate depends on the type of
goods and whether the seller has a Taxpayer Identification Number (NPWP).
Assuming the seller has an NPWP, the withholding tax rate for goods is typically 1%.
So, the SOE will withhold 1% of IDR 50,000,000, which is IDR 500,000.
3. The tax rate for imported goods depends on various factors such as the type of goods,
country of origin, and applicable trade agreements. However, for the sake of
simplicity, let's assume the applicable import tax rate is 10%. So, the company will
pay 10% of IDR 100,000,000, which is IDR 10,000,000.
4. The tax rate for PPh 22 on fuel purchases by local distributors is typically 0.1% of the
transaction value. Therefore, for a purchase of IDR 1,000,000 worth of fuel, the
distributor would pay a tax of IDR 1,000,000 x 0.1% = IDR 1,000.
5. Without an Importer Identification Number (API), the company would be subject to
PPh 22 withholding tax at a rate of 0.5% of the total transaction value. Therefore, for
imported consumer goods worth IDR 200,000,000, the company would pay a tax of
IDR 200,000,000 × 0.5% = IDR 1,000,000.

SHORT ESSAY
1. Self-assessment is a tax collection system that gives taxpayers trust and responsibility
to take the initiative in registering themselves to obtain a Taxpayer Identification
Number (NPWP) and manage all their tax affairs independently.
2. PPh 21 is an abbreviation for Income Tax Article 21, namely tax deductions made on
income in connection with work, services and activities paid to individuals who are
domestic Tax Subjects, including employees.
3. Types of transactions that are typically taxed, and the rates
 On import: which uses Importer Identification Number (API) = 2.5% x import
value; non-API = 7.5% x import value; uncontrolled = 7.5% x auction selling
price.
 For purchases of goods made by DJPB, Government Treasurer,
BUMN/BUMD = 1.5% x purchase price (excluding VAT and not final.)
 The sale of production results is determined based on the Decree of the
Director General of Taxes, namely: Paper = 0.1% x DPP VAT (Not Final)
Cement = 0.25% x DPP VAT (Not Final) Steel = 0.3% x DPP VAT (Not
Final) Automotive = 0.45% x DPP VAT (Not Final)
 The sale of production results or delivery of goods by producers or importers
of fuel oil, gas and lubricants are as follows: Article 22 Income Tax levies on
distributors/agents are final. Apart from that, distributors/agents are not final
 For the purchase of materials for industrial or export purposes from collecting
traders, it is set at = 0.25% x purchase price (excluding VAT)
 On imports of soybeans, wheat and wheat flour by importers who use API =
0.5% x import value.
  Top sales Private aircraft with a selling price of more than IDR
20,000,000,000 Cruise ships and the like with a selling price of more than
IDR 10,000,000,000 House and land with a selling price or transfer price of
more than IDR 10,000,000,000 and a building area of more than 500 m2.
Apartments, condominiums and the like with a sale or transfer price of more
than IDR 10,000,000,000 and/or a building area of more than 400 m2. Four-
wheeled motorized vehicles carrying less than 10 people in the form of sedans,
jeeps, sport utility vehicles (suv), multi-purpose vehicles (MPV), minibuses
and the like with a selling price of more than IDR 5,000,000,000 (five billion
rupiah) and with a cylinder capacity of more than 3,000 cc. 5% of the selling
price excluding VAT and PPnBM.
 For those who do not have a NPWP, the deduction is 100% higher than the
PPh Article 22 rate.
4. The Directorate General of Taxes (DJP) of the Ministry of Finance (Kemenkeu) will
not impose an additional 20 percent PPh 21 tax on workers who receive income who
do not have a Taxpayer Identification Number (NPWP). This applies as long as the
taxpayer's population identification number (NIK) has been integrated into the NPWP
and the DJP administration system. In the previous regulation, taxpayers who did not
have a NPWP were subject to a higher rate of 20 percent than taxpayers who had a
NPWP. With the integration of NIK into NPWP, taxpayers who do not have NPWP
do not need to pay higher rates.
5. Exception from the imposition of PPh article 22
a. Purchase goods with a purchase value of a maximum of IDR 2,000,000.00
(two million rupiah) without being broken up in several invoices
b. Purchase of fuel, electricity, gas, lubricants, drinking water/PDAM and postal
items
c. Payment for the purchase of goods in connection with users of school
operational assistance funds (BOS), BOP PAUD, or BOP Education others
d. Purchase of grain and or rice
Exemptions from the imposition of PPh 22 in Indonesia have an important role in
encouraging economic growth, increasing business competitiveness, and providing
incentives for certain sectors. However, good management and close monitoring are
needed to ensure that these exceptions provide benefits that are in line with the
government's intended objectives. Thus, the government needs to continue to
evaluate and reform tax policies in order to optimize the efficiency and effectiveness
of the tax system in Indonesia.
6. PPh 22 tax in Indonesia is considered a final tax in scenarios such as:
a. Income from royalties, interests, and dividends paid to non-resident
individuals or entities.
b. Income from sales of goods and services to final consumers, typically in retail
transactions.
c. Income from lottery winnings, prizes, and other gambling-related earnings.
In these cases, the PPh 22 tax is not considered a pre-payment for corporate or
individual income tax liabilities because it's regarded as the final tax obligation on the
income earned.
7. The withholding system makes it easier for taxpayers to carry out their tax obligations
because the withholding system mechanism can help provide state revenue efficiently
and also prevent tax avoidance practices.
8. Understanding exemptions and exceptions to withholding taxes is essential for
businesses to ensure compliance with tax laws, optimize tax liabilities, and manage
risks effectively. It enables businesses to operate more efficiently, maintain good
relationships with tax authorities, and seize opportunities for development and
competitiveness.
9. Domestic Transactions:
For domestic transactions, the tax rates under Article 22 vary depending on the nature
of the transaction. Some common rates include:
a. 0.1% for the transfer of land and buildings.
b. 0.1% for the sale of coal.
c. 0.1% for the sale of gold.
Import Transactions:
For import transactions, the tax rates under Article 22 apply to the import value of
certain goods. The rates depend on the type of goods imported and whether the
importer has a Taxpayer Identification Number (NPWP). Common rates include:
a. 0% for certain essential goods.
b. 2.5% for luxury goods.
c. 7.5% for non-luxury goods imported by individuals or entities without NPWP.
d. 2.5% for non-luxury goods imported by entities with NPWP.
Other Transactions:
Other transactions subject to Article 22 withholding tax include services, royalties,
and other income. The tax rates for these transactions are typically:
a. 2% for services provided by individuals or entities without NPWP.
b. 4.8% for services provided by entities with NPWP.
c. 2% for royalties paid to residents.
d. 10% for royalties paid to non-residents.
10. The tax rates applicable to different events under Article 22 income tax:
a. On import: which uses Importer Identification Number (API) = 2.5% x import
value; non-API = 7.5% x import value; which is not controlled = 7.5% x
auction selling price.
b. For purchases of goods made by DJPB, Government Treasurer,
BUMN/BUMD = 1.5% x purchase price (excluding VAT and not final.).
c. The sale of production results is determined based on the Decree of the
Director General of Taxes, namely:
1) Paper = 0.1% x DPP VAT (Not Final)
2) Cement = 0.25% x DPP VAT (Not Final)
3) Steel = 0.3% x DPP VAT (Not Final)
4) Automotive = 0.45% x DPP VAT (Not Final)
d. For the purchase of materials for industrial or export purposes from collecting
traders, it is set at = 0.25% x purchase price (excluding VAT).
11. Because the amount of PPh payable in 1 (one) calendar year is smaller than the
amount of PPh that has been paid.
12. The impact is on problems that arise due to the taxpayer's own mistakes, which can
increase compliance costs and trigger the emergence of double taxation which has an
impact on the tax burden. The non-enforcement of sanctions can reduce tax
obligations. Therefore, there is a need to sharpen administration to make it easier for
taxpayers, such as changes to the e-bupot feature and specifications for implementing
the PPh 23 withholding system, such as sanctions for not providing proof of
withholding to transaction partners.
13. As a source of state income, taxes function to finance state expenses. Taxes are used
to carry out routine state tasks and carry out development. Examples of the function
of this tax are providing health facilities, education, infrastructure and other public
services.
14. Income Tax Article 22 is levied on every payment made by KPP Pratama/KPPN or
Treasurer or delivery of goods by the Taxpayer. 2. PPh Article 22, which is collected
by the Treasurer, must be deposited on the same day as the payment for the delivery
of goods financed from state expenditure.
15. Withholding Tax System Exceptions: Supporting Government Operations and
Industries
 Encouraging Investment: Reducing or exempting withholding tax rates can
incentivize investment in key industries, promoting economic growth.
 Promoting Compliance: Tailoring withholding tax exceptions to specific
industries can reduce administrative burdens and ensure accurate tax liability
assessment.
 Supporting Strategic Goals: Governments can use exceptions to achieve policy
objectives like promoting innovation, supporting SMEs, and incentivizing
sustainable practices.
 Attracting Foreign Investment: Offering favorable withholding tax treatment
can attract foreign capital, stimulate job creation, and enhance domestic
industries' global competitiveness.
 Addressing Economic Challenges: Temporary withholding tax exemptions can
provide relief to industries facing financial difficulties during economic
uncertainty or crisis.