written by: R.R. Shinta Felisia

            We all agree that 2020 was an uneasy year full of changes due to the Covid-19 pandemic.  World economic activities such as trade and investment weakened. According to the Organisation for Economic Co-operation and Development (OECD), 2020 was marked by some of the largest reductions in trade and output volumes since World War II. The United Nations Conference on Trade and Development (UNCTAD) stated that the COVID-19 pandemic had an immediate and negative impact on foreign direct investment (FDI) in 2020.

          Such a disruption in economic activities certainly has an impact on the players with an active role in it, including Indonesia tax payers. World Bank figures show that Indonesia's per capita income fell from US$4,050 in 2019 to US$3,870 in 2020. To deal with this situation, Indonesia’s Ministry of Finance applied tax incentives as per Income Tax (PPh) Article 21, Article 22, Article 25, and Final Construction Services.

           In 2021, the number of Covid-19 cases started to decrease in numerous countries, and income tax revenues in Indonesia increased compared to 2020. Based on data from the Ministry of Finance, the received individual income tax grew 6.2% throughout 2021, and corporate income tax grew 25.6%, the highest recorded increase. The Minister of Finance, Sri Mulyani Indrawati, said that the growth was due to improvements in labor utility.

             This year, a number of countries also entered the Covid-19 endemic transition phase. This is a positive signal for those world economic activities that absorb labor to bounce back and heal income tax revenues globally. “As Covid slows, economies will improve. If a company’s performance is more productive that has the impact of increasing employee incomes,” said Deasy Christiana Nafawi, the Tax Division Manager at Moores Rowland Indonesia.        

             Income taxes not only support the taxpayers themselves, but also supports the life of citizens as a whole. Healing income taxes means healing hundred millions of lives. At Moores Rowland Indonesia, we provide comprehensive tax consulting including income tax services for you.