Taxation on Joki Services

Tax Consultant Office Bali, Agam Anand Konsultama

Various joki services have increasingly emerged on social media. From Strava jockeys, climbing jockeys, task jockeys, thesis jockeys, to exam jockeys, all offer services that help many people solve various problems. However, behind this controversial profession, there are tax obligations that need to be understood and complied with by jockey practitioners in Indonesia.

Joki Services Becoming Common in Indonesia

In Indonesia, the practice of jockeys is considered a common and openly normalized thing, with many people feeling that joki services are a legitimate profession that has no significant impact on society.

In fact, jockeys become a profession that violates ethics and is not justified as it includes deceit by claiming the work of others as one’s own. However, there are no clear legal provisions regarding joki service providers.

The emergence of rampant joki services is seen in the education and work sectors, driven by high supply and demand. Due to the high demand for joki services, there are even joki services that have become start-ups and legal entities in the form of limited liability companies (PT).

Tax Obligations of Joki Services

Even though it is a profession that violates ethics and is not justified, it cannot be denied that joki services still exist and continue to operate in Indonesia. Therefore, the taxation of joki services still needs to be considered.

According to the Indonesian Dictionary (KBBI), a jockey is defined as someone who takes exams for others by impersonating the real exam participant and receiving monetary compensation. Jockeys are usually offered by individuals to ‘help’ others’ work.

According to the Income Tax Law (UU PPh), any additional economic capability or monetary compensation received by taxpayers from within or outside the country constitutes taxable income.

Furthermore, in the Minister of Finance Regulation (PMK) No. 168/2023, it is explained that freelance work is work performed by individuals with specific skills aimed at earning income without being tied to an employment relationship.

From these definitions, it can be concluded that joki services are subject to tax on freelance work as they are performed by individuals receiving monetary compensation as an additional economic capability without an employment relationship.

Tax Calculation Schemes for Joki Services

Taxation on joki services can be calculated using 3 (three) schemes, namely using the Net Income Calculation Norm (NPPN), PPh 21 as non-permanent employees, and PPh 21 as non-employees with the following provisions:

Net Income Calculation Norm (NPPN)
- Generally, the calculation of Income Tax (PPh) for freelancers is done using the Net Income Calculation Norm (NPPN). The NPPN method uses the net income of the Taxpayer to calculate the owed tax. Joki services can use the NPPN method if they meet the requirements as per PER 17/PJ/2015, such as:
  - Gross income less than Rp4.8 billion per year
  - Income is not subject to Final PPh
  - Must keep records of income from business activities or freelance work
  - Apply for NPPN usage to DJP no later than 3 months from the beginning of the tax year
To apply for NPPN usage to DJP, the Taxpayer must submit it through DJP Online by:
1. Open the DJP Online page at https://djponline.pajak.go.id/account/login
2. Enter NIK/NPWP/NITKU, password, and security code, then click Login
3. Select Services menu and click on Info KSWP icon
4. On My Compliance Profile, select Notification of NPPN Usage

NPPN Percentage Rate List

The list of NPPN percentage rates is regulated in Article 4 and the Attachment of PER 17/PJ/2015 categorized by region, including 10 provincial capitals (Medan, Palembang, Jakarta, Bandung, Semarang, Surabaya, Denpasar, Manado, Makassar, and Pontianak), other provincial capitals, and other areas.

The list of NPPN percentage rates for individual taxpayers meeting NPPN requirements can use the NPPN rate according to the KLU code in the Attachment I PER-17/PJ/2015.

2. PPh 21 Non-Permanent Employees

Joki services are subject to PPh 21 for non-permanent employees if the individual is an employee, including freelance workers who only receive income when working based on the number of workdays or the completion of a specific job requested by the employer. In PMK 168/2023, the PPh 21 tax rate for non-permanent employees is calculated by:

- Gross Income: 0 – Rp2.5 million per day -> Daily TER x Daily Gross Income
- Gross Income: > Rp2.5 million per day -> Article 17 Rate x (50% x Gross Income)

Example of Tax Calculation for Joki Services with PPh 21 for Non-Permanent Employees: Mr. M is a task jockey working at PT Kerjaindong. The task jockey rate set by Mr. M on the Kerjaindong platform is Rp50 thousand per task. Mr. M receives orders for 10 tasks from PT Kerjaindong for 1 day. For these services, Mr. M is taxed as follows:

- Based on the gross income of Rp500 thousand per day (Rp50 thousand x 10 tasks), Mr. M is subject to the effective daily rate (TER Daily) of 0.5% for receiving income above Rp450 thousand up to Rp2.5 million.
- The amount of PPh 21 withholding per day: 0.5% x Rp500.000 = Rp2.500

3. PPh 21 Non-Employees

The taxation of joki services is subject to PPh 21 for non-employees if the individual is not tied to an employment relationship (neither permanent nor non-permanent employees) and receives income for services or freelance work performed based on requests from the payer. In PMK 168/2023, the PPh 21 tax rate for non-employees is calculated by:

- Article 17 Rate x (50% x Gross Income)

Example of Tax Calculation for Joki Services with PPh 21 for Non-Employees:
A thesis jockey, Mrs. D, charges Rp6 million for completing an undergraduate thesis from Chapter 1 Introduction to Chapter 5 Conclusions and Suggestions. Mrs. D receives an order from PT Jokinpilis to complete 1 thesis. For these services, Mrs. D is taxed as follows:

Basis for Tax Imposition and Withholding (DPP) for PPh 21 non-employees: 50% x Rp6.000.000 = Rp3.000.000
The amount of PPh 21 withholding: (5% x Rp3.000.000) = Rp150.000

Conclusion

A good understanding of the tax regulations for joki services is essential to avoid legal issues and ensure compliance. By knowing and fulfilling their tax obligations, joki service providers can run their businesses more securely and peacefully.

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