Based on data entitled Global Wealth Databook 2021 created by Credit Suisse, rich people in Indonesia who in 2020 have a net worth of over US$1 million total 171,740 people. This number increased rapidly by 62% compared to the previous year which only amounted to 106,215 people.
As for the super-rich with a net worth of over US$500 million, the number increased by four people compared to last year to a total of 50 people.
From the data above, it can be seen that during this pandemic, there were in fact tens of thousands of Indonesians who were promoted to become rich people. This is of course in stark contrast to the fact that many workers have to be laid off because of the many places of business or businesses that have to close and eventually go out of business.
In terms of the proportion of Indonesians who have a net worth of over US$1 million, only 0.1% of the total adult population in Indonesia. However, in reality, the rich, who only amount to 0.1%, actually control most of the wealth in Indonesia. This fact is confirmed by data on wealth savings also reported by Credit Suisse.
According to data on wealth savings made by Credit Suisse, the lowest group savings, namely those with a deposit value of IDR 100 million and below in May 2019, the proportion only reached 15.26% with a total wealth of IDR 878.51 trillion and in May 2021 this proportion plunged to only 13.61 %.
On the other hand, the proportion of deposits in the top group with a value of above IDR 5 billion in May 2019 was 46.19% with a total wealth value of IDR 2,659.68 trillion, but in May 2021 this proportion jumped again to 49.13%. .
The mastery of 49.13% of wealth by these rich people increasingly states that the national wealth in this country is mostly controlled by only a handful of people. And also shows a very wide economic gap between the poor and the rich.
On October 29, 2021, President Joko Widodo officially promulgated the Bill on the Harmonization of Tax Regulations (RUU HPP) to become Law (UU) Number 7 of 2021.
The HPP Law consists of nine chapters which have six regulatory scopes or clusters, namely General Provisions and Tax Procedures (KUP), Income Tax (PPh), Value Added Tax (PPN), Voluntary Disclosure Program (PPS), Carbon Tax, and Excise.
One of the changes regulated in the PPh UU HPP cluster is related to income ranges and PPh rates for individuals. In the lowest income range, there was a change, previously for income of 0-IDR 50 million, it was changed to 0-IDR 60 million and used the same rate as before, namely 5%.
It is hoped that this change in income range will further improve the welfare of low-income people, especially for individuals who have an income range of IDR 50 million-IDR 60 million a year in the form of a reduction in PPh expenses which were originally subject to a 15% PPh rate, down to 5%.
Considering that this income range, according to Global Wealth Databook 2021 data, also has the largest proportion in the grouping of net worth in Indonesia, it is hoped that there will also be many low-income people who can enjoy a reduced income tax burden.
Changes in the income range also occur at the top layer. Previously, owners of income above IDR 500 million were subject to a 30% rate. In the HPP Law, it is changed to income above IDR 500 million up to IDR 5 billion subject to a 30% rate. Also, a new top income range is added, namely income above Rp. 5 billion is subject to a 35% rate.
The imposition of a PPh rate of 35% which is intended for rich people who have income ranges above IDR 5 billion is expected to be able to redistribute tax revenue so that the benefits can be felt more widely by the wider community. This method can increase growth and support the acceleration of economic recovery, as well as the realization of a fair tax system.
So it is clear, the increase in the personal income tax rate contained in the HPP Law is not to burden the small community, but this is one of the keys to reducing economic inequality which has widened since the pandemic occurred.