Features, Perspectives, Types, Functions & Benefits – Kuri007.com
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Kuri007.com – Do you know the meaning of tax? Every country requires the payment of taxes from its people. Taxes are a source of state revenue that will be used for public and state interests.
Therefore, taxes are mandatory for everyone in this country, be they Indonesian citizens or foreign nationals. So this time we will discuss about taxes. Starting from the definition of tax, characteristics, perspectives, types, functions and benefits.
Immediately, the first is regarding the understanding of taxes that you should know below.
Definition of Tax
The definition of tax is a mandatory collection from the people for the state.
Every penny of tax money paid by people will be included in the postal state revenue from the tax sector.
Its use is to finance central and regional government spending for the welfare of the community. Tax money is used for public purposes, not for personal gain.
Taxes are a source of government funds to fund development at the central and regional levels, such as building public facilities, financing health and education budgets, and other productive activities.
Tax collection can be forced because it is done in accordance with the law.
Features of the Tax
Based on KUP Law No. 28/2007, article 1, paragraph 1, the definition of tax is a mandatory contribution to the state owed by individuals or entities that are coercive under law, without direct compensation and are used for state purposes for the great prosperity of the people.
Based on this understanding, taxes have the following characteristics:
1. Taxes are Compulsory Contributions of Citizens
This means that everyone has an obligation to pay taxes. However, this only applies to citizens who have fulfilled both subjective and objective conditions.
Namely citizens who have income exceeding Taxable Income (PTKP). The current PTKP is Rp. 54 million a year or Rp. 4.5 million per month. That means, if you have an income of more than Rp. 4.5 million per month will be taxed.
Meanwhile, if you are an entrepreneur or self-employed person with turnover, the final PPh rate of 0.5% applies from total gross circulation (turnover) of up to IDR 4.8 billion in one tax year (based on PP 23 of 2018).
2. Residents Do Not Receive Direct Benefits
Taxes are different from levies. An example of a levy: when you benefit from parking, you have to pay a certain amount, i.e. a parking fee, but the tax is not like that.
Taxes are a means of equal distribution of income of citizens. So when you pay some taxes, you don’t immediately receive the tax benefits paid.
What will you get, for example in the form of road improvements in your area, free health facilities for your family, educational scholarships for your children, and more.
3. Taxes are regulated under the Law
This means that taxes are regulated by state law. There are several laws governing the mechanisms for calculating, paying, and reporting taxes.
4. Taxes are coercive for every citizen
If a person fulfills the subjective and objective requirements, then he is obliged to pay taxes.
In the tax law it has been explained, if someone deliberately does not pay the taxes that must be paid, then there is a threat of administrative sanctions and criminal penalties.
Tax Perspective from the Economic and Legal Side
As the main source of state revenue, taxes have strategic value from a legal and economic perspective. Based on the 4 characteristics above, taxes can be viewed from 2 perspectives, namely:
1. Taxes from an Economic Perspective
This can be assessed from the transfer of resources from the private sector (citizens) to the public sector (community). This illustrates that taxes cause 2 situations to change, namely:
- Reduced individual ability to master resources for mastery of goods and services
- Improving the state’s financial capacity in the provision of public goods and services which are the needs of the community.
2. Tax from Legal Perspective
This perspective occurs because of the ties that arise because of the law which causes the obligation of citizens to deposit some funds to the state. Where the state has the power to coerce and taxes are used for governance.
This shows that the tax collected must be based on the law, thereby ensuring legal certainty, both for tax officials as tax collectors and for taxpayers as taxpayers.
Types of Taxes
There are several types of taxes levied by the government on the public or taxpayers, which can be classified by nature, collection agency, tax object and tax subject.
1. Types of Tax Based on Nature
Naturally, taxes are classified into 2 types, namely: indirect taxes and direct taxes.
1. Direct Tax
Direct tax is a tax that is given periodically to taxpayers based on a tax assessment letter made by the tax office.
In the tax assessment letter there is a number of taxes that must be paid by the taxpayer. Direct taxes must be borne by someone who is affected by the taxpayer and cannot be transferred to another party.
For example: Land and Income Tax (PBB) and income tax.
2. Indirect Taxes
Indirect taxes are taxes that are only given to taxpayers when certain events or actions are taken.
So indirect taxes cannot be collected periodically, but can only be collected if certain events or actions occur that cause the obligation to pay taxes.
For example: luxury goods sales tax (PPnBM), where this tax is only given if the taxpayer sells luxury goods.
2. Tax Type Based on Collection Agencies
Based on collection agencies, taxes are classified into 2 types, namely: state taxes and local taxes.
1. Local Tax (Local)
Regional taxes are taxes that are collected by the regional government and are limited to the residents of the area itself, both those collected by the Level II and Level I Regional Governments.
Examples are hotel taxes, restaurant taxes, entertainment taxes, motor vehicle taxes, PBB, BPHTB (rural and urban), and other regional taxes.
2. State Tax (Central)
State taxes are taxes collected by the central government through related agencies, namely the DGT. For example: VAT, Income Tax (PPh), PPnBM, duty stamps, PBB (plantation, forestry and mining).
3. Types of Taxes Based on Tax Objects and Tax Subjects
Based on object and subject, taxes are classified into 2 types, namely objective taxes and subjective taxes.
1. Objective Tax
Objective tax is a tax taken based on the object. For example: import taxes, motor vehicle taxes, stamp duty, and others.
2. Subjective Tax
Subjective tax is a tax taken based on the subject. For example wealth tax and income tax.
All administration related to central tax is carried out at the Tax Service Office (KPP), the Tax Counseling and Consultation Service Office (KP2KP), the Regional Office of the Directorate General of Taxes and the Head Office of the Directorate General of Taxes.
Meanwhile, administration related to regional taxes is carried out at the Regional Revenue Service Office or the Regional Tax Office under the local Regional Government.
Taxes have an important role in the life of the country, especially development. Taxes are a source of state revenue in financing all required expenses, including development costs.
So taxes have several functions, including:
1. Regulatory Function
Tax is a tool to implement or regulate state policies in the social and economic fields. Defined functions include:
- Taxes can be used to inhibit the rate of inflation.
- Taxes can be used as a tool to encourage export activities, such as taxes on exported goods.
- Taxes can provide protection or protection for manufactured goods from within the country, for example Value Added Tax (VAT).
- Taxes can regulate and attract capital investment that helps the economy become more productive.
2. Budget Function
Tax is a source of income for state finances by collecting funds or money from taxpayers into the state treasury to finance state expenditures and other national developments.
That way, the function of taxes is a source of state revenue with the aim of balancing state spending with state revenue.
3. Equity Function
Taxes can be used to adjust and balance income distribution with the happiness and welfare of society.
4. Stabilization Function
Taxes can be used to stabilize economic conditions and conditions, for example to stop inflation, so the government implements high taxes, so that the amount of money in circulation can be reduced.
Meanwhile, to overcome the economic crisis or deflation, the government reduces taxes, so that the money supply can be increased and deflation can be overcome.
The four tax functions above are tax functions commonly found in various countries. In Indonesia, the government is more focused on the two tax functions as regulator and budgeting.
The government agency that manages state taxes in Indonesia is the Directorate General of Taxes (DGT) under the Ministry of Finance.
The responsibility for paying taxes is on the community members themselves to fulfill this obligation, according to the self-assessment system adopted by the Indonesian Tax System.
Self-assessment means that taxpayers calculate, calculate, deposit and report their own tax obligations. So it does not force taxpayers to pay maximum tax, but according to statutory regulations.
In accordance with its function, DGT is obliged to provide guidance, counseling, services and supervision to the public. In carrying out these functions, DGT does its best to provide services to the public in accordance with its vision and mission.
For tax countries to benefit, including:
- Taxes are used as self-liquidating state expenditure, such as spending on productive projects.
- Taxes on reproductive costs, such as taxes that provide economic benefits to society. An example is for agriculture.
- Taxes are used as self-liquidating and unproductive expenses such as for the construction of monuments and recreation areas.
- Taxes are used for non-productive expenses such as national defense and protection of orphans.
Taxes also benefit society, including:
- Taxes to build infrastructure such as schools, roads, hospitals, and other public services.
- Taxes to provide food and fuel subsidies
- Tax for the provision of public transport services
- Taxes to finance environmental sustainability
- Taxes are also used for the implementation of democracy such as elections.
In essence, the taxes given to the state treasury will be used for the prosperity and welfare of the people of the country. Everyone will feel the benefits.
Thus the Lesson on Understanding Taxes: Characteristics, Perspectives, Types, Functions and Benefits, which we can convey, hopefully, can be useful for all of you. Thank you for studying with us and see you in our next article.