JAKARTA. Indonesia may lose Rp 54 trillion due to the government's decision to reduce the Corporate Income Tax (PPh) rate to 20% gradually, starting in 2021.
Director-General of Taxes of the Ministry of Finance, Robert Pakpahan admitted, the taxation authority had calculated the potential loss of state revenue, if the plan is implemented. "Rp 54 trillion [potential loss of state revenue in 2021]," Robert said after a limited meeting at the President's Office, Presidential Palace complex, Jakarta (3/9).
In the meeting, the government initially intended to reduce the Corporate Income Tax rate immediately. But if it is done, then the potential loss of tax revenue can be even greater. "If it is reduced directly, we see there is a [loss of revenue] of Rp. 87 trillion. That is [every] one year," said Robert.
This condition is one of the government's considerations to gradually reduce the Corporate Income Tax rate, in order to maintain the optimal implementation of the State Budget (APBN).
The government ensures that in 2021, Corporate Income Tax rate will be gradually reduced. In 2023, it is expected that the Corporate Income Tax rate will be 20%. (AM/AR)