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Summary
In December 2023, the Indonesian Government issued regulation No 58/2023 (Government Regulation 58, “GR 58”) and the related implementing regulation, i.e. Minister of Finance regulation No 168/2023 (“MoF 168”) in relation to the Tax Rate for Withholding Income tax Art 21/26 (“WHT 21”). The regulations are effective from 1 January 2024.
The purpose of these regulations is to simplify the calculation of monthly WHT 21/26 by the employer/payer of income related to work, services, and activities. In essence, a simplified approach is used for salary/wages withholding for eleven months, with a ‘true-up’ in the December period, such that there is accurate withholding for the year.
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