The company's good performance is commonly associated with achieving profit targets. Indirectly, higher profit will lead to greater Corporate Income Tax. To avoid taxpayers' objections in paying the amount of corporate income tax payable at the end of the year, government stipulate a tax installment policy, specifically through monthly installments of Income Tax Article 25.

Companies that state to have profits on their Annual Corporate Income Tax in the previous tax year, must pay monthly installments. This is due to the fact that the amount of Income Tax Article 25 installments for the current year (this year) is calculated by subtracting the tax payable in the previous year (last year) from the Income Tax returns Articles 21, 22, 23, and 24. As a result, taxpayers who had losses in the previous tax year are not required to pay installments of Income Tax Article 25 for the current year.

In fact, company's performance does not always remain consistent from year to year. Many factors can influence changes in company performance, including external factors (weakening currency values, inflation, resource scarcity, and rising commodity prices) and internal factors (conflict, governance, and managerial efficiency and effectiveness).

In this regard, significant changes in the current year's performance will affect the amount of the current year's calculation of installments of Income Tax Article 25. Companies with a significant increase in performance in the current year will have to pay a much higher tax payable at the end of the year. In other words, the current year’s Corporate Income Tax will be far greater than the total installment of Income Tax Article 25 paid for 12 months.

To overcome this, government regulates that taxpayers can adjust the amount of installment in the current year in accordance with company’s current year condition. This is also referred to as dynamization.

Dynamization is a recalculation of Income Tax Article 25 installment due to a significant increase in company profits. In accordance with Article 7 KEP-537/PJ./2000, dynamization is carried out for businesses whose Income Tax payable for the current tax year is estimated to be more than 150% (one hundred and fifty percent) of the Income Tax payable for the previous tax year (Income Tax payable is the basis for calculating the amount Income Tax Article 25).

The amount of Income Tax Article 25 installments will change as a result of dynamization. This amount is determined by the Taxpayer or the Head of Tax Office based on the estimated increase in the Income Tax payable. The change in the number of Income Tax Article 25 installments is effective for the remaining months of the relevant tax year. Furthermore, Yon Arsal, Expert Staff to the Minister of Finance for Tax Compliance, stated that dynamization is not a special activity, but a routine activity carried out by the Directorate General of Taxes in accordance with applicable tax provisions.