Three Categories of Effective Monthly Article-21 PPh Tariffs Introduced

The Indonesian Government has officially introduced a new legal framework that simplifies the procedure for the securing of Article-21 Income-Tax (Pajak Penghasilan Pasal 21 – “PPh 21”) deductions through the issuance of Regulation of the Government No. 58 of 2023 (“Regulation 58/2023”), which has been in force since 1 January 2024. This new regulation addresses PPh 21 deductions for various types of taxpayers, specifically individuals who receive income in relation to work, offered services or activities, including civil servants, state officials and members of the Indonesian National Army and Indonesian National Police Force, along with the relevant associated pensions.[1] As such, PPh-21 calculations for civil servants, state officials and members of the Indonesian National Army and Indonesian National Police Force, as originally addressed under Regulation of the Government No. 80 of 2021, are no longer applicable and provisions set out under the new framework of Regulation 58/2023 will now apply.[2]