GOVERNMENT REGULATION NO. 5/2003 DATED JANUARY 20, 2003
ON
INCOME TAX ON INCOME RECEIVED BY WORKERS UP TO THE AMOUNT OF PROVINCIAL MINIMUM WAGE OR
REGENCY/CITY MINIMUM WAGE
THE PRESIDENT OF THE REPUBLIC OF INDONESIA,
Considering :
a. that pursuant to Gove rnment Regulation No. 25/2000 on the authority of the government and the authority of province as autonomous regions, governors are authorized to stipulate the amount of provincial minimum wage or regency/city minimum wage every year;
b. that in relation to the above mentioned matter and in the framework of providing better justice in the imposition of income tax on workers, it is necessary to stipulate a government regulation concerning income tax on income received by workers up to the amount of provincial minimum wage or regency/city minimum wage.
In view of :
1. Article 5 paragraph (2) of the Constitution of 1945 as already amended by the Fourth Amendment to the Constitution of 1945;
2. Law No. 7/1983 on income tax (Statute Book of 1983 No. 50, Supplement to Statute Book No. 3263) as already amended several times and the latest by Law No. 17/2000 (Statute Book of 2000 No. 127, Supplement to Statute Book No. 3985);
3. Government Regulation No. 25/2000 on the authority of the government and the authority of provinces as autonomous regions (Statute Book of 2000 No. 54, Supplement to Statute Book No. 3952);
DECIDES :
To stipulate :
THE GOVERNMENT REGULATION CONCERNING INCOME TAX ON INCOME RECEIVED BY WORKERS UP TO THE AMOUNT OF PROVINCIAL MINIMUM WAGE OR REGENCY/CITY MINIMUM WAGE.
Article 1
Referred to in this government regulation as :
1. Workers shall manpower working in industrial relations with entrepreneurs by receiving wage.
2. Wage shall be a worker right received and stated in the form of money as a compensation from entrepreneurs to workers for a job or service already or to be executed, stipulated and paid according to a working agreement, commitment or legislation, including allowance of workers and their family.
Article 2
Income tax on income amounting to the provincial minimum wage or regency/city minimum wage after being subtracted by untaxed income shall be borne by the government.
Further provisions needed for implementing this government regulation shall be regulated by a decree of the Minister of Finance.
Article 4
With the enforcement of this government regulation, Government Regulation No. 72/2001 concerning income tax on income received by workers up to the amount of provincial minimum wage or regency/city minimum wage (Statute Book of 2001 No. 132, Supplement to Statute Book No. 4148) shall be declared null and void.
Article 5
This government regulation shall come into force as from the date of stipulation and be retroactive to January 2, 2003.
For public cognizance, this government regulation shall be promulgated by placing it in Statute Book of the Republic of Indonesia.
Stipulated in Jakarta On January 20, 2003
THE PRESIDENT OF THE REPUBLIC OF INDONESIA sgd.
MEGAWATI SOEKARNOPUTRI
Promulgated in Jakarta On January 20, 2003
THE STATE SECRETARY sgd.
BAMBANG KESOWO
ELUCIDATION ON
GOVERNMENT REGULATION NO. 5/2003 CONCERNING
INCOME TAX ON INCOME RECEIVED BY WORKERS UP TO THE AMOUNT OF PROVINCIAL MINIMUM WAGE OR
REGENCY/CITY M INIMUM WAGE
GENERAL
As a result of promulgation of Government Regulation No. 25/2000 on the authority of the government and the authority of provinces as autonomous regions, the regional minimum wage changes into provincial minimum wage or regency/cit y minimum wage. The amount of minimum wage effective in provinces or regencies/city is stipulated by governors every year.
The fact show that many workers still earn monthly income exceeding the untaxed income, but lower or equal to the amount of provincial minimum wage or regency/city minimum wage. The condition results in the imposition of income tax article 21 on the said income, thus being able to reduce the goal of enhancement of welfare of the said workers.
In relation thereto, in the case of income of workers amounting to the provincial minimum wage or regency/city minimum wage, the government bears income tax on the said income.
ARTICLE BY ARTICLE
Article 1
Sufficiently clear
Article 2
In the case of the untaxed income exceeding the provincial minimum wage or regency/city minimum wage, the government bears no income tax.
Article 3 up to Article 5 Sufficiently clear
