Abolishing fiscal tax

spicyayam

Well-Known Member
Jan 12, 2009
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I read Vyt's blog every week and I think he has a great point about the fiscal tax that everyone has to pay when they leave Indonesia if they aren't registered for paying tax.

The government announced that they are doing away with the system. ie. you don't have to pay the fiscal if you are already registered as a tax payer, which is basically just the same as before.

It seems to me to be a strange policy as it is only really forcing people who might travel overseas to register for tax. Of course the government's thinking is that if you can afford to travel overseas, you can afford to pay tax. The problem is that I am sure that there are many people who have no desire or intention of traveling overseas, but should be still paying into the tax system.

I just find it a bit strange as to why the government doesn't just require everyone over a certain age to have to register for a tax number or for businesses who employ staff to get them to register, rather than just trying to target people who want to travel out of the country.



http://borborigmus.wordpress.com/
 
I just find it a bit strange as to why the government doesn't just require everyone over a certain age to have to register for a tax number or for businesses who employ staff to get them to register, rather than just trying to target people who want to travel out of the country.
The treshold to be a tax payer is set at above 18 millions of income per year (don't remenber exactly the figure) for any single individual. More if you are married (about 21 millions) and even more if you have kids or anyone in charge. In Indonesia only a tiny proportion of the population would be effectively taxpayers if you consider these figures. Registering all the adult population as tax subject with only a few of them being effective tax payers would have a cost and would be very heavy in terms of logistic. The Republic of Indonesian simply can't afford it... yet.
Businesses who employ staff are supposed to register staff and pay taxes on their behalf. However, the system is prone to corruption and a large part of taxes are simply evaded.