English for Tax
History of Taxation
History of Taxation
O During the reign of Egyptian Pharaohs
O Scribes as tax collectors
O In Greece
O A tax referred to as Eisphora was imposed only in times of
war
O In Athens
O A monthly tax called Metoikon was collected to foreigners
O Ancient Greek Taxation
O Taxation was used as an emergency power. Additional
resources gained from war were used to refund tax previously
collected from the people
O Earliest taxes in Rome
O Taxes known as Portoria were customs duties on imports
and exports
O Augustus Caesar introduced the inheritance tax to provide
retirement funds for the military. The tax was five percent on
all inheritances except gifts to children and spouses
O In England
O Taxes were first used as an emergency measure
O Taxes on income or capital were a recent development as a
result of increasing government intervention in the economy
O In Modern Industrial Nations
O The government designates a tax
base (such as income, property
holdings, or a given commodity)
O A Tax Law is a body of rules passed by
the legislature by which the
government acquires a claim on tax
payers to convey, transfer and pay to
the public authority
Taxation
O The system of compulsory
contributions levied by a government
or other qualified body on people,
corporations and property in order to
fund public expenditures.
O An inherent power of the state to raise
income and to demand enforced
contributions for public purposes.
The Purposes of Taxation
The Purposes of Taxation
O To raise revenues for public needs so that persons
can live in a civilized society
O The government increase taxes in order to stabilize
prices and stimulate greater production.
O An instrument of fiscal policy influences the direction
and structure of money supply, investments, credits,
production, interest rate, inflation, prices and in
general, of the national economy
Characteristics of a sound Tax system
OFairness
OClarity and Certainty
OConvenience
OEfficiency
Effects of Taxation
O Personal Income Tax which is presumed to
fall entirely on the legal taxpayers influences
decisions to work, save, and invest. These
decisions affect other people.
O Corporate Income Tax may simply result to
lower corporate profits and dividends. It may
reduce their income of all owners of
property and businesses. The company may
move toward raising the prices of their
products
Taxation in Indonesia
Taxation in Indonesia
O Indonesian taxation is based on Article 23A
of UUD 1945 (1945 Indonesian
Constitution), where tax is an enforceable
contribution exposed on all Indonesian
citizens, foreign nationals and residents who
have resided for 120 cumulative days within
a twelve-month period.
O Indonesia has a stratification of taxation
including Income Tax, Local Tax (Pajak
Daerah) and Central Government Tax.
Indonesia Taxation Law
O
O
O
O
The relevant eight fundamental taxation laws of Indonesia include:
General Provisions and Taxation Procedures Law "Undang-undang Ketentuan
Umum dan Tatacara Perpajakan/UUKUTp" Law No. 6/1983, amended by
Law no.16/2000;
Income Tax Law ("Undang-undang Pajak Penghasilan/UU PPh": Law
No.7/1983, amended by Law No. 17/2000;ameded by law No 36/2008
Value Added Tax VAT termed 'Goods and Services and Sales Tax on Luxury
Goods' ("Undang-undang Pajak Pertambahan Nilai atas Barang dan Jasa
dan Pajak Penjualan atas Barang Mewah"/UU PPN/PPn BM ): Law No.
8/1983, amended by Law No. 18/2000;
Indonesia Taxation Law
O Land Tax and Building Tax ("Undang-undang Pajak Bumi
O
O
O
O
dan Bangunan - UU PBB"): Law No. 12/1985 amended
by Law No. 12/1994;
Warrant for Tax Collection ("Undang-undang Penagihan
Pajak dengan Surat Paksa/UU PPSP") Law No.
19/1997, amended by Law No. 19/2000;
Fees for Acquisition of Rights to Lands and Buildings
("Undang-undang Bea Perolehan Hak atas Tanah dan
Bangunan/UU BPHTB") Law No. 21/1997 amended by
Law No. 20/2000;
Tax Court Law ("Undang-undang Pengadilan Pajak/UU
PP"): Law No. 14/2002;
Stamp Duty ("Undang-undang Bea Meterai/UU BM") in
short, Law Number 13 of 1985.
Taxation Rate
O Indonesia has a series of progressive sliding rate taxes
for all categories. Furthermore, as a developing nation,
much economic activity is done at the 'cottage' level
where sales and services taxation are tax exempt.
O Indonesia's taxations system recognises the economic
reality of the majority poorer citizens and the poor are
exempt from almost any taxation.
O The underlying ethic of "gotong-royong"- "neighbourly [sic
moral] help" is applied where the more fortunate
wealthier are enforced to meet their moral obligation of
a heavier burden of tax- regardless of arbitrary
arguments to its fairness.
Kind of Taxes
O Income Tax
O ncome taxation is subject to Regional (Propinsi) government
O
O
O
O
regulations defined by the economic realities of that particular
area. As mentioned above, the poorer denizens are exempt
from almost all taxation.
Corporation Tax
Companies in Indonesia are taxed at a rate of 25%, for both
domestic and international sourced income. Resident
Indonesian companies are required to withhold tax at a rate of
20% from payments to foreign companies.
Goods and Services Taxation
A Goods and Services Tax (GST) is levied at the rate of approx
10% at point of sale, by major vendors. Sales and services tax
are exempt from cottage economies and industries.
Kind of Taxes
O
O
O
O
O
Land and Constructions Tax
Land Tax and Tax for the buildings constructed there upon must
paid annually, or may be paid via arrangement in ten-year blocks
by Indonesian land title deed-holders, pursuant to relevant criteria
for exclusions. In general terms, this tax is applicable mainly to
those of the middle classes and upwards. Land holding businesses
must also pay this tax.
Land and Constructions thereupon are calculated at a value
calculated by the Regional government- which is less than real
market worth
Vehicles
Passenger Vehicle Tax is required to be paid by all owners, the
rationale being those fortunate enough to afford a motor vehicle
can afford to subsidise their poorer brethren who rely on far less
luxurious public transportation. Again, Regional Government
legislates the specific definitions regarding this tax.
O Year end tax settlement for
employees
O Application forms and english
certificates
O Tax guide
O Tax official
O Tax payers
O Tax payer registered number
O Tax Payment:
O A number of money that must be paid by
taxpayers
O Tax Law:
O The government’s regulation about tax
O Tax Office:
O A place where all the tax can be handled
O National Tax Service: ..........
O Individual Income Tax Return:............
O Year end tax settlement for employees
O Application forms and english certificates
O Tax guide
O Tax official
O Tax payers
O Tax payer registered number
ASSIGNMENT
Explain one topic of Indonesia Taxation,then
prepare a short presentation of it (in a group)!