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6+ Differences in Taxes and Retributions and Examples [LENGKAP]

Many people who are still confused by the term tax and retribution. Some of them even thought the two terms were the same. Although both compulsory levies must be paid, both certainly have differences in implementation.

Well, in this article, we will discuss the differences in taxes and levies. In everyday life, we are generally faced with retribution rather than taxes such as parking retribution, health service fees and others.

Taxes and Retributions

In fact, we also often think that levies paid as retribution are taxes. In fact, in fact, taxes and levies are clearly different though almost similar. So, in order to better understand the differences in taxes and levies, let's look at the explanation below.

What is Tax?

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Taxes are community contributions as a form of mandatory contributions to coercive state based on law. Taxes must be paid by each party, including taxpayers (individuals or institutions / bodies). The money obtained by taxes will be used to finance various kinds of public needs and achieve public welfare.

Tax violations such as refusing or avoiding tax payments include illegal acts and can be subject to sanctions or punishments in accordance with legislation that applies.

What is retribution?

 retribution

Retribution is a regional levy imposed on parties / communities as a form of service payment or provision of certain permits provided by the Regional Government for personal or agency interests.

Differences in Taxes and Levy

1. Legal Basis

  • Taxes – Based on Article 23 A of the 1945 Constitution, namely "Taxes and other levies which are compelling for state purposes are regulated by Law", Law No. 6 of 1983 concerning General Provisions and Tax Procedures, Law No. 7 of 1983 concerning Income Tax, and Law No. 8 of 1983 concerning Value Added Tax and Sales Tax on Luxury Goods.
  • Retribution – Based on Government Regulations (PP), Ministerial Regulations, or other lower state officials. For example, the Regional Regulation (Perda) of Malang City No. 3 of 2015 concerning Public Service Retribution, Regional Regulation (Perda) of the Special Capital Region Province (DKI) Jakarta No. 1 of 2015 concerning Amendments to Regional Regulations and No. 3 of 2012 concerning Regional Retribution.

2. Service Payments

  • Taxes – After paying taxes, Taxpayers will not immediately get / enjoy their services. This is because, the tax collection results will be collected first, then it will be allocated to public needs such as building facilities and infrastructure.
  • Retribution – After paying retribution, the payers will be able to immediately receive / enjoy services such as people who paying health service levies will immediately get the health services he has paid for.

3. Objects

  • Taxes – Objects that can be taxed are income, luxury goods, motorized vehicles, company profits and others.
  • Retribution – Objects subject to retribution are certain people or entities that use services or permits from the government such as terminals, market services, and health services.

4. Nature

  • Tax – Must be paid by the Taxpayer if it refuses or avoids paying taxes, the related party will be subject to sanctions or punishments in accordance with applicable laws.
  • Retribution – Can be forced but economical to individuals or entities that use or obtain services and permits from the government.

5. Collection Agencies

  • Taxes – State taxes are collected by the Tax Directorate (Central Government) while local taxes are collected by regional apparatus organizations such as Regional Revenue Agency or Tax Service Agency.  Differences in Taxes and Retributions and Examples [19659015] Retribution – Retribution collected by the regional government, namely the Regional Revenue Service (Dispenda).

6. Purpose

  • Tax – To develop and improve the country's economy and improve the welfare of society as a whole.
  • Retribution – To provide services or permits to the community so that they can carry out their activities and obtain services from the local government.

Types and Examples of Taxes

Here are some types of taxes and examples.

A. State Tax

State tax or central tax is tax collected by the Central Government consisting of:

  1. Income Tax (PPh) – Regulated in Law No. 7 of 1983 concerning the "Income Tax" which was last amended into Law No. 36 of 2008.
  1. Value Added Tax (VAT) and Sales Tax on Luxury Goods (PPnBM) Regulated in Law No. 8 of 1983 concerning "Value Added and Sales Tax on Luxury Goods" which was last amended in Law No. 42 of 2009.
  1. Stamp Duty – Regulated in Law No. 13 of 1985 concerning "Stamp Duty".
  1. Import Duty – Regulated in Law No. 10 of 1995 and Law No. 17 of 2006 concerning "Customs".
  1. Excise – Regulated in Law No. 11 of 1995 and Law No. 39 of 2007 concerning "Excise".

2. Regional Tax

Based on Law No. 28 of 2009 concerning "Regional Taxes and Regional Retributions", here are below several types of Regional Taxes.

  1. Provincial Taxes – such as:
    • Motor Vehicle Taxes;
    • Fees for Transfer of Motorized Vehicles;
    • Motor Vehicle Fuel Tax;
    • Surface Water Tax; and
    • Cigarette Tax.
  1. Regency / City Tax – such as:
    • Hotel Tax;
    • Restaurant Tax;
    • Entertainment Tax;
    • Advertisement Tax;
    • Street Lighting Tax ;
    • Taxes for Nonmetal Minerals and Rocks;
    • Parking Taxes;
    • Groundwater Taxes;
    • Taxes for Swallow Bird Nest;
    • Taxes on Rural and Urban Land and Buildings; and
    • Fees for Acquisition of Land and Building Rights

In addition to the two types of tax above, based on their form, taxes are divided into two:

  1. Direct Tax is a type of tax charged directly to taxpayers, such as wealth tax and income tax.
  2. Indirect Tax is a type of tax imposed on taxpayers indirectly as a mandatory contribution to the state, such as cigarette excise.

Whereas, based on the amount to be paid, the tax is divided into three types, namely:

  1. Income Tax – taxes imposed on taxpayers on annual income or profit from a person or limited liability company (PT).
  1. Sales Tax – tax imposed on taxpayers when the occurrence of sales transactions of goods or services to buyers
  1. Business Entity Tax – taxes charged to business entities such as banks. [1 9659068] Types and Examples of Retribution

    Retributions are divided into three types, namely:

    1. Public Service Retribution

     Public Service Retribution [1945653] </p data-recalc-dims=

    Those including general service levies included:

    • Health Service Retribution.
    • Waste / Hygiene Service Retribution.
    • Identity Cards and Civil Registration Acts.
    • Funeral and Accomplishment Service Levies.
    • Parking Roadside Service Retribution.
    • Market Service Levy.
    • Motor Vehicle Testing Retribution.
    • Equipment Inspection Levy
    • Reimbursement of Map Printing Fees.
    • Supply Retribution and / or Sewerage.
    • Liquid Waste Treatment Levies.
    • Tera / Tera birthday Service Retribution.
    • Educational Service Retribution. [19659045] Telecommunication Tower Control Retribution.

    2. Business Service Retribution

    Including business service fees include:

    • Regional Wealth Utilization Retribution
    • Wholesale Market Retribution and / or Shops.
    • Auction Levy
    • Terminal Retribution.
    • Special Place Retribution for Parking.
    • Retribution for Lodging / Villas.
    • Retribution for Slaughterhouses.
    • Port Service Retribution.
    • Retribution for Recreation and Sports Places.
    • Crossing Retribution on Water. [19659045] Regional Business Production Sales Levy.

    3. Licensing levies

    As for licensing levies, among others:

    • Building Construction Permit (IMB).
    • Levies on License for Sale of Alcoholic Beverages.
    • Disruption Permit Retribution.
    • Route License Levies. [19659045] Fisheries Business Permit Retribution.

    Well, hopefully the discussion about the differences in taxes and levies as explained above is useful. Thank you!

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