The government has been urged to review its tax policy for insurance agents, which is said to have created legal uncertainty.
The Indonesian Insurance Agents Association (PAAI) said that tax concerns have arisen following the implementation of several regulations and the Core Tax Administration System. In particular, the interpretation of one regulation requires insurance agents to register as Taxable Entrepreneurs.
PAAI assessed that this combination of policies and systems has a direct impact on the administrative obligations and tax burdens of insurance agents in the field.
PAAI Chairman, Muhammad Idaham, stressed that insurance agents are generally compliant with their tax obligations. However, he noted that the current policy does not accurately reflect the realities of the insurance agent profession.
“We are seeking clarity on the legal status of insurance agents as taxpayers to prevent misinterpretation and uncertainty in implementation,” he said in a written statement yesterday.
According to PAAI, the current tax policy has resulted in the majority of agents being in a position where they report higher taxable income, despite no substantial increase in their revenue.
The association is seeking a formal dialogue with the government to promote fair, proportional, and consistent tax policies for insurance agents.