Jakarta – The Confederation of the Indonesian Workers Unions (KSPI) has rejected a government plan to lower the limit on non-taxable income (PTKP) to increase tax revenue.
KSPI president Said Iqbal stressed that the move would burden low-income workers. "We will reject the plan to lower the PTKP limit," said Iqbal in Jakarta on Sunday as reported by Antara.
Currently, a person earning Rp 54 million (US$4,056) per year or Rp 4.5 million per month or less is exempt from paying income tax. The limit will reportedly be revised down to the level of minimum provincial wages or about Rp 3 million per month.
Finance Minister Sri Mulyani announced that her ministry had studied the possibility of lowering the limit because Indonesia had the highest non-taxable income limit in the world.
Iqbal called on the government to instead force rich people to pay their unpaid taxes and not further burden low-income workers.
He argued that people's purchasing power was already very low and lowering the non-taxable income limit would worsen people's purchasing power. (bbn)