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Abstract

This research critically assesses Indonesia's in-kind benefit tax regulatory framework based on the principles of equity, certainty, and neutrality, drawing comparative insights from Australia's fringe benefits tax system. Utilizing a normative juridical method, this study finds that integrating in-kind benefits into Indonesia's income tax framework poses several challenges. First, under the equity principle, current valuation methods do not accurately reflect employees' ability to pay, potentially resulting in inequitable tax burdens. Second, under the certainty principle, ambiguities in the exemption rules may create risks of differing interpretations between taxpayers and tax authorities. Third, under the neutrality principle, differential treatment across industries and unclear valuation standards may distort fair competition and undermine a level playing field among industries. To address these issues, this paper identifies several lessons from Australia's fringe benefit tax framework for improving the regulation of in-kind benefit tax in Indonesia, namely: (1) separating the in-kind benefit tax object from the scope of taxable income; (2) employing more diverse valuation methods based on the type of in-kind benefit; (3) incorporating a general minimum value threshold under the exemption rules; and (4) establishing clear and detailed guidelines for both taxpayers and tax officials to avoid misinterpretation. These findings provide both theoretical and practical contributions to strengthen Indonesia's in-kind benefit tax system toward a more equitable, certain, and neutral regulatory framework.

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