Employee Tax Payments Increased in 2022, Reaching a New Record High

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Adi Ahdiat 05/12/2023 16:20 WIB

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State revenue from Article 21 PPh, or employee income tax, reached Rp172 trillion in 2022. This figure is up 18% compared to 2021 and represents a new record high.

State Revenue from Article 21 Income Tax/Employee Tax (2004-2022)

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State Revenue from Article 21 Income Tax/Employee Tax (2004-2022)

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State revenue from Article 21 Income Tax (PPh 21) or employee tax reached Rp172 trillion in 2022.

Tax payments increased by approximately 18% compared to 2021 (year-on-year), setting a new record high.

The Ministry of Finance (Kemenkeu) defines Article 21 Income Tax as "a deduction from income paid to individuals in connection with employment, position, services, and activities".

The tax object in Article 21 Income Tax is the monthly fixed income received by employees (such as salary and allowances), as well as the non-fixed income received by employees, non-employees, and activity participants (such as activity fees, speaker fees, and so on).

Currently, the deduction of Article 21 Income Tax uses the formula: Taxable Income (Annual net income - Non-Taxable Income) x progressive rate.

However, starting in 2024, the Ministry of Finance will implement a new, simpler calculation system.

"God willing, starting January 2024, we will use a methodology for collecting Article 21 Income Tax using a simpler average effective rate," said the Director General of Taxes at the Ministry of Finance, Suryo Utomo, as reported by Bisnis.com on Monday (27/11/2023).

"Until now, the process of drafting the legal basis for setting the average effective rate is still underway," Suryo added.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."