Tax is one of the biggest contributors to state revenue. Although the benefits cannot be felt directly, taxes play an important role in the sustainability of a country and in national development. As a taxpayer, you need to recognize the various types of taxes that exist in order to facilitate the tax settlement process. Based on the method of collection, taxes are grouped into two, namely direct taxes and indirect taxes. Then, what is meant by direct tax and indirect tax? What are the examples? Let’s see the discussion below!
Direct Tax
Before knowing what are the examples, you should first understand the definition of direct tax. Direct tax is a tax imposed on taxpayers and must be paid personally or directly by the taxpayer concerned and cannot be charged to other parties. Judging from the payment process, this direct tax has a regular nature of collection and payment is made periodically. The implementation of this tax obligation is carried out as long as the taxpayer fulfills the elements or conditions in accordance with the applicable law (UU).Examples of this type of direct tax include:
- Income Tax (PPh)
This tax is imposed on income received in the tax year. The obligation of Income Tax is attached to the taxpayer or tax subject concerned so that it cannot be replaced or represented to other parties.
- Land and Building Tax (PBB)
This tax is levied on land or buildings that have been adjusted in accordance with the legislation. PBB is a tax that has a property nature, where the size of the tax is determined by the condition of the object, namely the land and building. Meanwhile, the taxpayers are individuals or entities that have rights to land and buildings, and obtain benefits from them.
- Motor Vehicle Tax
This tax is imposed on anyone who owns a two-wheeled vehicle or more. The subjects of this tax are individuals or entities that own or control motorized vehicles. The amount is based on the selling value of the motor vehicle, then the weight and impact of the use of the vehicle related to the level of road damage and environmental pollution are also taken into account.
Indirect Tax
After understanding about direct taxes and what are the examples, it’s time to know the definition and examples of indirect taxes. Indirect tax is a tax whose payment process can be charged to another party. So, the taxpayer has the authority to submit the tax payment by being represented by another party. The transfer of this authority must also be based on an event that makes it possible for the taxpayer to transfer their tax obligations to individuals or entities designated as other parties to pay a certain amount of tax. Unlike direct taxes, this type of tax collection is erratic, and its enforcement is not carried out periodically like direct taxes. Indirect taxes also do not have a tax assessment letter that regulates tax withholding and remittance because the nominal and payment procedures have been regulated in law. Examples of indirect taxes include:
- Value Added Tax (VAT)
VAT is a tax imposed on any value added of goods or services in the production or distribution process. VAT is usually imposed on the sale and purchase of goods or services carried out by Corporate Taxpayers who have registered as Taxable Entrepreneurs (PKP).The burden of VAT is actually charged to the producing party. However, because the goods or services produced are enjoyed by other parties, in this case consumers, the tax can be transferred to these consumers.
- Import Duty Tax
This tax is levied by the government on goods entering the customs territory. This tax is not levied by parties that contribute to the entry of goods into the customs area such as freight forwarders or manufacturers. Instead, it is levied on the person who transacts the goods.
- Export Tax
Similar to import duties, but the difference is that export taxes are imposed on official levies made by the government on goods that will be removed from the customs area. The collection is the same, charged to the party who wants or wants to export their goods abroad, not the party who produces the goods.
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That’s the explanation of direct and indirect taxes and their examples. Hopefully it can provide knowledge to you related to taxation, yes! But for those of you who currently still do not fully understand the tax provisions or do not want to be complicated in taking care of tax reporting, administration of other tax services, or even making other legal documents, you can immediately contact Kontrak Hukum. Through the Digital Business Assistant (DiBA) service, Kontrak Hukum can be a means for those of you who want to consult, starting from corporate tax matters, legality in business, brands, and about other businesses. For more details about DiBA services, KH pals can enter the page https://kontrakhukum.com/digital-assistant/. Contact Kontrak Hukum through the following link Ask KH, or send a Direct Message (DM) on our Instagram social media @kontrakhukum.
