Government Sets Tax Exemption for Employees Earning Rp 10 Million
Jakarta. Starting in January, employees earning up to Rp 10 million ($616) per month will no longer have to pay Income Tax Article 21.
Dwi Astuti, the Director of Counseling and Services at the Directorate General of Taxes at the Finance Ministry, said this policy applies to employees in industries such as footwear, textiles, ready-made clothing, furniture, and leather.
This policy was issued to maintain people's purchasing power following changes in tax rates that took effect at the beginning of the year.
“The purpose of this PMK issuance is to maintain national economic stability while ensuring that the public's purchasing power remains intact, despite the increase in the VAT rate to 12 percent,” she said in an official statement on Monday.
However, to enjoy this incentive, the employee's monthly salary must be below Rp 10 million, and the company they work for must be registered with a business classification code in accordance with the regulations set forth.
“This policy also aims to maintain national economic stability,” she added. For more information, employees can visit the official tax website at pajak.go.id.
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