Jakarta. Sleekr, an online-based human resources and accounting software platform, has teamed up with OnlinePajak, a web-based tax reporting application, to integrate the two services and enable small and medium enterprises to seamlessly track their payrolls, employee bonuses and tax obligations.
Sleekr and OnlinePajak launched the collaboration on Tuesday (29/08) after proposing the move in mid-2016 and starting work on the engineering and product development in May this year.
"We see that there are currently many companies that find it difficult to report their taxes – both PPh 21 and VAT," said Suwandi Soh, Sleekr chief executive and founder.
Employers in Indonesia are required to withhold the so-called PPh 21 tax – named after the relevant article in the Income Tax Law – from their employees' taxable incomes and pay it over to the government on their behalf. According to the law, tax rates are progressive, starting at 5 percent of an annual taxable income of up to Rp 50 million ($3,700) up to 30 percent of an annual taxable income of at least Rp 500 million.
"Sleekr and OnlinePajak hope that this integration will help the Indonesian government improve companies' tax compliance, especially SMEs," Suwandi said.
Charles Guinot, OnlinePajak director and founder, said companies spend on average 221 hours annually to file taxes, which consumes "precious time" for new or small companies that lack dedicated teams to handle human resources and manage tax payments.
"And if you can't speak Indonesian, you're dead," he said, noting his own experience in building a company and filing its tax report five years ago. "People won't comply not because they don't want to."
Soeprapto, assistant deputy for nonbank financing and taxation at the Ministry for Cooperatives and Small and Medium Enterprises, echoed Guinot's comment. He said there are currently more than 59 million micro, small and medium enterprises (MSMEs) in Indonesia that contribute about 57 percent of the country's gross domestic product. However, many are not familiar with their tax obligations.
"We've been working with the Directorate General of Taxes since 2010 to help them to not fear tax officials," he said.
"They are actually not afraid [...] they don't know how to pay tax," Soeprapto said, noting that only about 390,000 of the country's 59 million MSMEs reported their taxes in 2015.
Sleekr and OnlinePajak have come up with a solution that will bypass complexities and reduce the time required to file taxes from 221 hours per year to several minutes.
The software integration allows Sleekr users to import their financial transactions and employee data into the OnlinePajak application, which calculates all tax obligations.
According to its website, Sleekr charges its clients Rp 10,000 per employee per month for Sleekr HR – the service is free for up to 20 employees – and up to Rp 299,000 per month for its Sleekr Accounting service. The OnlinePajak service is free of charge.
About 1,000 companies and tens of thousands of employees are currently using Sleekr's services, while more than 300,000 corporate taxpayers are using OnlinePajak's service.