By: Mika Putri Larasati)*
The government has confirmed that there are no plans to lower the tax threshold for Micro, Small, and Medium Enterprises (MSMEs). This was confirmed by the Coordinating Minister for Economic Affairs, Airlangga Hartarto, who emphasized that the tax threshold for MSMEs remains at IDR 4.8 billion. Thus, all news circulating on social media regarding the lowering of the tax threshold for MSMEs cannot be justified.
The government, through Airlangga, revealed that every year an evaluation is carried out on the MSME tax threshold policy. However, there are no plans to make changes or lower the threshold, even though there was previously a recommendation from the Organization for Economic Cooperation and Development (OECD) to lower the limit to IDR 3.6 billion. The recommendation was not immediately followed, and the government maintained the limit of IDR 4.8 billion for the coming year.
Meanwhile, the Secretary of the Coordinating Minister for the Economy (Sesmenko), Susiwjono Moegiarso, confirmed that despite discussions regarding adjusting the threshold, the government is maintaining the figure of IDR 4.8 billion.
This aims to provide incentives for MSMEs that have a turnover of up to IDR 4.8 billion per year, with a Final Income Tax (PPh) facility of 0.5% and free Value Added Tax (PPN).
The incentive is estimated to reach IDR 61.2 trillion next year, as part of the government’s policy to support the MSME sector in maintaining competitiveness and expanding the tax base in Indonesia.
In that context, Sesmenko also added that the adjustment of the UMKM tax threshold should consider the conditions in neighboring countries. For example, Thailand and the Philippines apply a threshold of PKP (Taxable Entrepreneurs) of around IDR 800 million per year.
However, Indonesia still chooses to maintain a higher threshold of IDR 4.8 billion to provide more flexibility for MSMEs to enjoy lighter tax facilities.
Thus, even though there is talk of lowering the threshold, the government is committed to not reducing MSME access to the 0.5% Final Income Tax facility which has been proven to support the development of this sector.
It is important to note that while there is news circulating that the government is considering lowering the tax threshold for MSMEs, this is not true. Some parties on social media are trying to spread inaccurate information about this, which can cause confusion for business actors.
However, the government has firmly stated that the policy regarding the tax threshold remains at Rp4.8 billion. Thus, MSMEs can feel calmer and can continue to develop their businesses without having to worry about unclear policy changes.
The Minister of Micro, Small and Medium Enterprises (MSMEs), Maman Abdurrahman, also emphasized that the new policy regarding taxes, especially with the increase in VAT to 12%, will not have a significant impact on MSMEs.
The VAT increase will only affect goods that fall into the category of luxury goods and upper middle class consumption, such as premium meat or luxury hotel facilities. Therefore, the MSME sector which mostly operates at the micro and small level will not be affected by this VAT change.
Maman also ensured that the government remains committed to providing various incentives for MSMEs, including reducing income tax (PPh) to 0.5% for MSMEs with an annual turnover of between IDR 500 million and IDR 4.8 billion.
The policy will continue to apply for the next seven years, providing an opportunity for MSMEs to grow without being burdened by high taxes. For MSMEs with a turnover of less than Rp500 million per year, the government does not impose a 0.5% PPh tax at all, so that the MSME sector can still enjoy the existing convenience and incentives.
As part of the government’s efforts to support MSMEs, the 0.5% Final Income Tax facility provided to MSMEs with a turnover of less than IDR 4.8 billion is a strategic step in strengthening the competitiveness of small and medium business actors.
With these incentives, MSMEs can focus more on developing their businesses without being burdened by high taxes. The government also ensures that smaller MSMEs, with a turnover of less than Rp500 million, still get convenience by being free from PPh tax obligations.
Overall, the government’s policy on MSME taxes shows a commitment to support this sector, which is one of the main pillars of the Indonesian economy. The government has allocated various forms of incentives to encourage the development of MSMEs, including the extension of the 0.5% Final Income Tax facility and VAT exemption for many MSME products.
Therefore, even though there is news circulating about the reduction of the tax threshold, the public must be wise in filtering information and not be easily influenced by rumors that are not necessarily true.
In the future, the government will continue to strive to maintain the MSME ecosystem so that it continues to grow, by considering various inputs and evaluations. The reduction in the tax threshold which had been a hot issue will not be continued, and the MSME sector will continue to receive support from various incentives that have been designed.
As a sector that absorbs a lot of labor and plays an important role in the Indonesian economy, MSMEs will continue to be a priority in economic policies that are oriented towards people’s welfare.
The government realizes that the development of MSMEs is very important to realize a more advanced and prosperous Indonesia. Therefore, the government remains committed to maintaining tax policies that support the growth of MSMEs, which in turn will support the growth of the national economy as a whole.
)* The author is a contributor to the Nusantara Reading Room