Criticize Government Regulation Number 46 Year 2013

On June 12, 2013, the Government has enacted Government Regulation No. 46 Year 2013 concerning Income From Business Received Or Earned by Taxpayers Who Have Certain Gross Turnover. This Government Regulation shall come into force by July 1, 2013.

Under the provisions of Article 2 Paragraph (1), in conjunction with Article 3 Paragraph (1) and (2), in conjunction with Article 4 paragraph (1) GR No. 46 Year 2013 above, the income of the business received or earned by taxpayers who have a certain turnover, shall be subject to final income tax of 1% of gross turnover every month.

While the term “taxpayer who has a certain gross turnover” means the taxpayer who meets the following criteria:

a. individual taxpayer or corporate taxpayers not including a permanent establishment, and
b. receive income from the business, excluding income from independent personal services, with respect to the gross turnover does not exceed Rp 4,800,000,000.00 in one tax year.

Taxpayers are excluded from the above provision are as follows:

1. for individual taxpayers:
a) individual taxpayers who earn income from independent personal services with respect to, which include: 1) experts who do the independent personal services, consisting of lawyers, accountants, architects, doctors, consultants, notaries, appraisers, and actuaries; 2) music players , host, singer, comedian, movie star, soap star, commercials, film director, film crew, photo model, fashion models, drama artists, and dancers; 3) sportsman; 4) counselor, teacher, coach, speaker, educator , and moderator; 5) writer, researcher, and translator; 6) advertisement agency; 7) supervisor or project manager; 8) intermediate; 9) officers merchandise vendors; 10) insurance agent, and 11) multilevel marketing or direct selling and other similar activities; (see: Article 2 paragraph (2) letter b.)
b) individual taxpayers who undertake trade activities and / or services which in their business use the facilities or infrastructure that can be assembled, whether settled or not settled, or
c) individual taxpayers who undertake trade activities and / or services in an attempt to use some or all of the places in the public interest that are not destined for a place of business or selling. (see: Article 2 Paragraph (3)
2. For corporate taxpayers:
a) corporate taxpayers who derive income from independent personal services, (see Article 2 paragraph (2) letter b.)
b) corporate taxpayers who have not been in commercial operation, or
c) corporate taxpayers who are in a period of 1 year after the commercial operation receive gross turnover exceeds Rp4.800.000.000, 00. (see Article 2 Paragraph (4)

For taxpayers whose income is subject to final income tax under this Government Regulation and maintains bookkeeping, may compensate their losses in respect of their business income is not subject to income tax which is final under this Government Regulation.


1.    For taxpayers, both corporate taxpayers and individual taxpayers, whose gross turnover more than Rp 4.8 billion / year, when in a year tax they loss, they will not be taxed. Even the losses can be carried forward for a maximum of 5 (read: five) years. Whilst for taxpayers, both corporate taxpayers and individual taxpayers whose gross turnover does not exceed Rp 4.8 billion / year and they do not include as the excluded taxpayer mentioned above, when in a tax year  they suffer losses  in, is subject to a tax of 1% of the gross turnover.

Is this what the so called “justice in taxation”????

Are for individual taxpayers, who are exempt as described in item 1. letter b) and c) above as exempt from final tax of 1% of gross turnover, not be  taxed??? Or are they taxed at progressive rates as stipulated in Article 17 paragraph (1) letter a. of Act No. 36 of 2008??? If they were not be taxed, it would be sorrow  for the lowly employees, daily workers, and contract workers, whose income exceed the Non Taxed Income, because they are more unlucky fate due to they have to pay taxes, although their income per month may be lower than the income derived by  individual taxpayers who are excluded from final tax of 1% off the gross turnover.

2.    For individual taxpayers and entities that gross income does not exceed Rp 4.8 billion / year, if they received other income outside the income fall under the final tax they are obliged to maintains bookkeeping separately, in order to compensate the loss suffered from the business outside of business subject to final tax under GR No. 46 Year 2013. Whiles for taxpayer whose turnover exceeds Rp 4.8 billion / year it is not necessary to maintain bookkeeping separately. Though one of the goals of the enactment of this Government Regulation is based on consideration of the need for simplicity in tax collection, reduced administrative burden for taxpayers (see Item I Explanation PP. 46 in 2013).

Considerations are not the right target??

3.   Both the number of taxpayers who meet the criteria, as well as those are excluded in Indonesia amounted to thousands maybe even hundreds of thousands.

Shall the Directorate General of Taxes be able to identify which are the taxpayers who meet the criteria and which are excluded??? Whilst managing the normal taxpayers is overwhelmed.

If the implementation of Government Regulation No. 46 Year 2013 is not managed properly, it will cause tremendous economic injustice because there will be thousands and even tens of thousands of taxpayers who pay taxes and who do not pay taxes. Subsequent result, taxpayers who pay taxes will be selling goods or providing services that are more expensive than those that are not “seized” by tax. Further sub-sequences there will be many enterprises those went bankrupt because of competition

4.   Tax rate of 1% of gross turnover must be obtained from calculation results of the imposition of the tax rate multiplied by the amount of estimated net income (as a taxable income, that is the net profit received by the taxpayer after deducted by the deductible costs allowed by income tax law).

Unfortunately, taxpayers do not get an explanation of how the amount of estimated net income as the basis for calculating the amount of final tax of 1% of the gross turnover.

Actually, I still have other comments, but my comments, I limit up here that is not much.

Dear readers, do you have any comments on the Government Regulation Number 46 Year 2013?. Your comment would be very useful to broaden insight of Indonesian taxation to other readers.

About Jaja Zakaria

Nama saya Jaja Zakaria, saya tinggal di Depok, Jawa Barat, kurang lebih 40 km dari Jakarta Selatan. Saya alumni Fakultas Hukum Universitas Gadjah Mada, Yogayakarta, dan Opleidings Instituut Financien, Den Haag, Belanda di bidang Hukum Pajak Internasional. Saya pengarang beberapa buku, e-book, dan makalah-makalah perpajakan. Pengalaman saya antara lain pernah menjadi anggota delegasi Indonesia dalam perundingan Perpajakan dengan Denmark, Mesir, Kanada, Uni Emirat Arab, Kuwait, Turki, Brunei Darussalam, Pilipina, Vietnam, Mongolia, dan Taiwan; dalam Study Group on Asian Tax Administration and Research (SGATAR) meeting; dan dalam Joint Commission Indonesia - China. Saya juga anggota International Word Tax Expert.

Posted on July 8, 2013, in English Version, Taxation Topic and tagged , , . Bookmark the permalink. 14 Comments.

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