TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search results
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search resultsMSME tax revamp draws mixed response
The government says changes to the final income tax regime are aimed at preventing abuse by larger firms, but business advocates warn the new rules could create fresh challenges for genuine small enterprises.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
A buyer pays his bill using the Quick Response Indonesia Standard (QRIS) code at a street foodstall on Jl. Ampera Raya in South Jakarta on Feb. 6, 2021. (Antara/Reno Esnir)
F
inance Minister Purbaya Yudhi Sadewa has defended the government's overhaul of tax incentives for micro, small and medium enterprises (MSMEs), saying the changes are designed to stop larger businesses from disguising themselves as small enterprises to continue enjoying a preferential 0.5-percent tax rate.
"This is not about making things difficult for MSMEs, but about ensuring that MSMEs that have moved up a class pay taxes according to their class," Purbaya said on Monday.
The remarks come amid a debate over Government Regulation (PP) No. 20/2026, which narrows access to the 0.5 percent final income tax (PPh) regime for MSMEs.
The regulation, which revises PP No. 55/2022, limits eligibility to individual taxpayers, sole-shareholder limited liability companies and cooperatives with annual gross revenue of no more than Rp 4.8 billion (US$266,000).
Purbaya said MSMEs currently benefiting from the 0.5 percent final income tax facility could continue using it until their eligibility period expires, with a transition period extending until 2029 and regulatory changes to primarily affect new taxpayers seeking to access the scheme.
The policy has drawn mixed responses from economists and MSME advocates, who argue that the government's attempt to curb tax avoidance could end up creating new burdens for legitimate small businesses.
Read also: Tax revenue grows considerably in May, Purbaya says
