13 Types of Tax in Indonesia – Characteristics

Taxation is a policy that aimed to support a state prosperity. In Indonesia, the rule of taxation is arranged in UUD 1945. As a good citizen, you have to pay the tax on time. Actually, there are some groups of taxation in Indonesia you might know. The most common group is direct and indirect tax. The direct tax, as it mentioned is the tax that directly paid to the government by the taxpayer. Meanwhile indirect tax is the tax charged from the goods or services.

However, we would not discuss about direct and indirect tax. Here, we prefer divide the tax into national and regional taxation.  To get more information of the groups of taxation, it would better for you read these following paragraphs.

National Taxation

National Taxation is the tax that managed by the Central Tax office of Indonesia. You, as the taxpayer should pay by yourself and may not be represented. Here are the types of National Tax.

1. Personal Income Tax

If you are a worker, have you registered for a tax of your income? If you haven’t, make sure to read UUD 1945 Article 21 below, it states:

Income tax is a tax of salaries, wages, allowances or other payments for those who receive or obtain a profit from employment / occupation, services and activities.

However, if your wage or salary is small, don’t worry because there is a various minimum rate of salary for those who want to pay this tax. The rate usually depends on the regional minimum wage.

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2. Tax on Luxury Goods

The luxury goods are usually owned by the upper class people. The luxury goods have some characteristics, such as: not a staple, consumed by certain groups of people, consumed by high income people, and consumed to show the status. If you purchases of goods that categorized above, you may be a subject of Sales Tax on Luxury Goods. Besides, don’t forget to pay Value Added Tax within it.

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3. Value Added Tax

VAT or Value added tax will be charged when you buy or sell a good. If you make a purchase of a good which these specifications, you should pay a VAT:

• Submission of Taxable and Taxable Services within the Customs Area conducted by the entrepreneur
• Import of Taxable Goods
• Utilization of intangible Taxable Goods from outside the Customs Area within the Customs Area
• Export of intangible or intangible Taxable Goods and Export of Taxable Services by Taxable Entrepreneur

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4. Stamp Duties

Stamp duty is a charged tax for the use of document. However, not all of the documents used stamp duty. The documents that need a stamp duty, such as: letters of agreement, notarial deeds, payment receipt, securities, and securities containing the amount of money or nominal amount.  Actually, there are two kinds of stamp duty, IDR 3000 and IDR 6000. You could use IDR 3000 for your small document, and 6000 for the more important document.

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5. Import Duties

Have you ever bought a good from abroad via online? If you have so, you will be charged an import duty. In other words, import duty is a state levy imposed on imported goods. That is why the postal fee of the imported goods would be more expensive than local goods.

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6. Excise Duties

In Indonesia, excise duty is popular as “cukai”. Excise duty is the tax for certain goods having these characteristics:

• the consumption needs to be controlled;
• its circulation needs to be monitored;
• its use may have a negative impact on the community or the environment; or
• its use needs to be charge of some levies for justice and balance of the state

In Indonesia, there are three goods that should be charged for excise duties; cigarettes, alcoholic beverages, ethyl alcohol. That is why in a pack of cigarettes there is a price for excise duties.

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Regional Taxation

Regional taxation is a tax that is charged in a region area of your livings. Here are the types of regional taxation.

1. Motor Vehicle Taxation

 Vehicle taxation is an annual taxation for those who own a motor vehicle. You could do the payment of this tax in every city or district on where your vehicle registered. However, if you live in a different region, you could pay the tax via online. Recently, the government has updated the system of tax payment.

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2. Vehicle Transfer of Tittle

After buying the used or second motor vehicle, the owner usually want to do a transfer of tittle. If you do so, you will be charged some amount rupiahs for the tax. Once you do transfer of tittle, your name will be officially stated on the vehicle registration certificate.

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3. Parking Tax

When you visit a department store, tourism, and other public places, you will be charged for a parking fee. The charge of parking is under regional provision. Actually, every parking company service provider on outer off-street parking spaces includes motor vehicle daycare are levied parking tax.

However, be careful of illegal parking fee. They usually take a personal benefit by charging the higher amount of parking fee. The standard parking fee in Indonesia is IDR 2000 for a motorcycle and IDR 5000 for a car per hour.

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4. Hotel Tax

If you see carefully on your hotel bill, you would see a charge of hotel tax. It is without any reason for a hotel charging a tax for the guest.  In the perception of some people, Hotel Tax is only charged for the cost of lodging.

If you look at the provisions of UU No. 28 Year 2009 on Regional Taxes and Levies, all of hotel charges activities and all of entertainment services also include as the component of the Hotel Tax.

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5. Advertisement Tax

In Indonesia, advertisement tax is famous as ‘Pajak Reklame’. According to UU Number 16 of 2011 on Regional Taxes, here are the kinds of advertisement that should pay the advertisement tax:

• Billboards / billboards / videotron / megatron billboards;
• Fabric billboards;
• Embedded advertisements, stickers;
• Leaflets billboards;
• Billboards running, including on vehicles;
• Air billboards;
• Floating advertisement;
• Voice billboards;
• Movie / slide show, display billboard

Remember that advertisement on electronic or mass media is not included in above. So, you should not be charged for it.

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6. Street Lighting Tax

Regional Regulation of Road Lighting Tax Number 15 2010 that is translated from Indonesia, it states:

“Road lighting tax is a tax from the use of electricity, either self-generated or obtained from other sources. Electric customers are the persons and / or entities that become owners / tenants / residents of houses and other buildings using electricity from PLN / non PLN.”

Once you have a small shop and you attach road lighting in front of it, you would be charged of road lighting tax. 

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7. Tax on Land and Buildings

 If you are the owner of land and buildings, make sure to pay the tax. This is a kind of annual tax, that should be paid to the regional government. However, there are some requirements of the house that must pay the tax. In Jakarta, it is just a house more than 100 m2 that would be the object of tax. It would have the different qualification for other regions.

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Those are the types of tax in Indonesia. Make sure to pay the tax on time. Usually the government would send you a warning letter to send a tax before 2 or 3 months of the dateline the payment. If you have not registered your property, vehicles, or luxurious stuffs, you could soon register it.