Common Mistakes People Do When Filing a Tax Report

Based on data from the Directorate General of Ministry of Finance, more than 9 million Indonesian taxpayers filed their tax reports in 2015. Although this number does not represent the total number of taxpayers, there is an increase in the number of people who reported their income tax.

One of the duties of a good citizen is to pay taxes. The first step that you can do to fulfill that duty is to register yourself to get a  tax registry card (NPWP).

During your work period, your employer will deduct part of your income and pay the income tax under your name, according to the tax registry card number that is reported to the company. Some companies do not deduct your income because it has already been paid by the company. It all depends on the agreement between you and the HRD when you apply for the job.

In one year period, your company will give you the Withholding Tax slip as a proof that your company has helped paid your tax income to the government. Next, you only need to report it using the tax report (SPT) Form and send it to the Directorate General of Taxes. You can choose to submit it at the nearest tax office, send it through postal service, or use e-Filing method.

For those who want to give the last option a try, e-Filing is a method of submitting annual tax report (SPT) via online through the internet or Application Service Provider (ASP). The e-Filing system at the Directorate General of Taxes website currently receive personal tax report using 1770 S and 1770 SS forms.

According to Sulfan, a member at Committee of Tax Supervision from the Ministry of Finance, filling the SPT form is already simplified by showing the numbers that need to be written on the tax report form. However, mistakes are still unavoidable.

Here are some common mistakes found on annual tax reports – hopefully you can avoid these errors to save yourself from the time-consuming activity this year and so on:

1. Administrative Errors

The most common administrative errors would involve data and forms. Before you are filling in a tax form, you need to make sure that you are using the correct form.

“If the status of the taxpayer is an employee, then he or she has to fill the 1770S form (for annual income greater than Rp 60 million) and 1770SS form (for annual income less than Rp 60 million),” says Sulfan who has been handling tax related issues for almost two decades.

If the taxpayer is an entrepreneur, then the correct form to use is the 1770 form.

Based on Sulfan’s observation, there are some misunderstandings while filling the annual tax report. “People often make mistake when filling in the NPWP box, where they should put their own NPWP, but instead they put the company’s NPWP,” says Sulfan.

Apart from those mistakes, filling the tax form is prone to human error. No matter how lazy you are to place a bunch of numbers into the tax form, make sure you always re-check before sending it to the tax office. A mistake in placing numbers can make you owe some amount in the future.

2. Failure to Attach the Withholding Tax Slip

Withholding Tax slip from your company is an important document while filing an annual tax report. Don’t forget to attach the copy of your Withholding Tax slip together with the annual tax report form you have completed. You still need to keep the original slip for your archive. If you have more than one source of income, please make sure that your side job also gives you the Withholding Tax slip.

“Sometimes, the employers deduct the income tax, but they don’t give the proof to the employee, so actually it is the employee’s loss,” says Sulfan.

3. Fail to Report Taxes from Your Side Job

Following the aforementioned matter, your income from side job is also taxable. Not everyone is honest and open about their side business and report everything. Some also do not know that the side job income is tax-deductible and must be reported.

Make sure by asking your company or employer whether the amount of salary you receive is after or before tax. If it is after tax (net), you must ask for the proof of tax deduction to the company. After that, add up the net income from your main source and other source of income on your SPT form.

If one fails to do so, there are various sanctions waiting for him or her. Sulfan mentioned an administration penalty as much as 2% if the tax office finds any tax due is not paid, based on Article 13 no. 2 of General Taxation Provisions and Procedures Law (KUP).

In addition, there are also criminal sanctions for negligence and also due to deliberate action. However, the government rarely implements this type of sanction. “Normally the tax office receives data from a third party, then they do some examination. Taxpayer will be given advice first, then followed by examination if there is no respond,” Sulfan explains. If the results of examination reveal any deterrent effect for the community, the government will be impose a criminal sanction.

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