A doctoral promotion at the Faculty of Administrative Sciences, Universitas Indonesia (FIA UI), discussed the reformulation of the Net Income Calculation Norm (NPPN) policy for independent medical practitioners. As a timeless profession with a significant potential to contribute to tax revenue, the medical field requires special attention regarding tax policy. The reformulation of the NPPN policy should balance key taxation principles, including fairness in ability to pay, adequacy for state revenue, and ease of administration.

Dr. Neni Susilawati, S.Sos., M.A., delivered these remarks during her doctoral promotion session in Administrative Science on Wednesday, January 3, 2024, at the EDISI 2020 Auditorium, FIA UI. Her dissertation, titled “Reformulation of the Net Income Calculation Norm Policy for Independent Medical Practitioners: A Policy Study Based on System Model Construction,” addressed critical issues surrounding the current taxation framework for doctors.

According to Dr. Neni’s initial observations, the number of doctors in Indonesia has increased over the past decade. However, the contribution of income tax (PPh) from the medical profession has remained stagnant despite the fact that doctors were recorded as having the highest salaries in Indonesia in 2023. Furthermore, medical service payments made by BPJS Kesehatan (the national health insurer) to affiliated doctors are not subject to income tax withholding, impacting national tax revenues.

Dr. Neni also highlighted concerns about fairness raised by medical professionals themselves. Under Directorate General of Taxes (DJP) Regulation No. 17 of 2015, the NPPN rate for doctors is uniformly set at 50% across all regions and medical specializations, including general practitioners, dentists, and specialists. Representatives from the Indonesian Medical Association (PB IDI) argued that differences in medical practice types and geographic locations affect doctors’ gross income and operating costs.

The urgency of reforming the NPPN policy arises from the fact that most doctors rely on the NPPN system when reporting their income through annual personal income tax returns. Additionally, the DJP’s Directorate of Tax Regulations II, which is currently revising the NPPN policy, requires academic research to guide decisions on whether to differentiate NPPN rates based on medical specialties, practice locations, and the status of independent or affiliated practices.

In her dissertation, Dr. Neni proposed a conceptual framework for a “Pro-Fairness Presumptive Tax Policy” to ensure a fairer taxation system while facilitating the transition from a presumptive tax regime to a conventional tax regime. This approach aims to strike a balance between ideal tax collection principles and the formalization of taxpayers. Her research identified key components of doctors’ gross income, including patient payments and BPJS Kesehatan reimbursements, while practice costs cover operational and professional expenses. She recommended adjusting the NPPN policy by differentiating rates for various medical specializations and adding a specific tax classification (KLU) for dental specialists.

To implement the Pro-Fairness Presumptive Tax Policy effectively, Dr. Neni suggested introducing mandatory non-cash payment systems and the use of simple accounting applications connected to the core tax system. This would streamline tax compliance and administration while ensuring greater fairness in the taxation of independent medical practitioners.

Dr. Neni became the 38th doctoral graduate from FIA UI and the 226th in Administrative Science, earning the distinction of “With High Honors.”

The doctoral promotion was chaired by Prof. Ir. Bernardus Yuliarto Nugroho, MSM., Ph.D., with Promoters Prof. Dr. Chandra Wijaya, M.Si., M.M., and Prof. Dr. Gunadi, M.Sc., Ak., and Co-Promoter Dr. Ning Rahayu, M.Si. The examination committee included Dr. dr. Mahlil Ruby, M.Kes., Dr. Andreo Wahyudi Atmoko, M.Si., Prof. Dr. Haula Rosdiana, M.Si., Dr. Milla Sepliana Setyowati, M.Ak., and Dr. Inayati, M.Si.