The Directorate General of Taxes (DJP) has stated that the tax\ncollection mechanism for micro, small, and medium enterprises (MSMEs)\nthat have been removed from the 0.5% final income tax (PPh) facility,\nsuch as CV and PT business entities, is no longer based on turnover.<\/p>\n
Director General of Taxes Bimo Wijayanto explained in a written\nstatement in Jakarta on Monday that taxes will now be calculated based\non net profit after deducting permitted operational costs.\n\u201cTransitioning to the general mechanism does not automatically result in\na larger tax burden,\u201d Bimo noted.<\/p>\n
The government removed CVs and PTs from the 0.5% final PPh facility\nthrough Government Regulation (PP) Number 20 of 2026 regarding\nAdjustments to Income Tax Regulations. Under the new rules, the 0.5%\nfinal PPh facility can only be utilised by individual taxpayers, sole\nproprietorships (perseroan perorangan) established by one person, and\ncooperatives. Under previous regulations, this facility was available to\ncooperatives, limited partnerships (CV), firms, limited liability\ncompanies (PT), and Village-Owned Enterprises (BUMDes).<\/p>\n
According to Bimo, the new regulation is an improvement to ensure\nthat tax incentives are more targeted, simple, and sustainable. \u201cThis\npolicy is designed to ensure MSMEs have ample space to grow, drive\nregional economies, and create jobs without being burdened by complex\ntax administration,\u201d he said.<\/p>\n
In addition to the shift from turnover-based to profit-based taxation\nfor entities like PT and CV, several other key points are regulated in\nthis policy. Firstly, the turnover threshold for utilising the 0.5%\nfinal PPh facility remains at Rp4.8 billion per year. Furthermore, the\nprovision for turnover up to Rp500 million per year being tax-free for\nindividual taxpayers remains in place. Additionally, the 0.5% final rate\nfacility can be used indefinitely, whereas for cooperatives, it can be\nused for four years from the date of registration.<\/p>\n
\u201cThis aims to allow business actors to focus on developing their\nbusinesses without administrative burdens,\u201d Bimo added.<\/p>\n
The government is also anticipating loopholes for potential abuse,\nsuch as the practice of splitting businesses or forming multiple new\nentities to avoid normal tax rates. This strategy is implemented to\nensure that tax incentives are truly received by growing businesses\naiming to scale up. \u201cThe government wants to be present not just as a\nregulator, but as a partner accompanying the journey of business actors.\nWe want to ensure our MSMEs transform into businesses that are stronger,\nmore independent, and highly competitive,\u201d he concluded.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/djp-tax-levies-for-msme-cvs-and-pts-are-not-based-on-turnover-1780933018", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }