Association: 0.5% MSME Income Tax Implementation Must Be Accompanied by Supervision

The Chairwoman of the Central Board of the Indonesian Micro, Small and Medium Enterprise Industry Association (Akumandiri), Hermawati Setyorinny, has stated that the implementation of the 0.5 percent Final Income Tax (PPh) for MSMEs must be accompanied by supervision of unscrupulous entrepreneurs. “Every regulation must have its supervision running. But that also needs to be fixed with the socialisation of the Government Regulation, socialisation of the rules, socialisation of the programme, and then there must be mentoring for the micro business actors themselves,” Hermawati said when contacted in Jakarta on Friday. Hermawati said that in implementing this policy, the government needs to look at practices in the field where there are still individual PT business actors who split their businesses. She also opined that this regulation cannot be applied uniformly to CVs or non-individual PTs with a micro business scale. She explained that the definition of a micro business as stipulated in Government Regulation No. 7 of 2021 must not conflict with the 0.5 percent Final PPh regulation. “So the country should focus on those who are unscrupulous. Not then use a regulation that should be for them (Individual PTs) for everyone. Because most of the individual PTs or CVs have actually only emerged recently,” she said. She stated that the implementation of this policy must not kill business opportunities and MSME productivity. Hermawati said that besides implementing the 0.5 percent final PPh, the state must also provide markets, restrictions on imported goods entering Indonesia to increase the purchasing power of local products and improve competitiveness, access to bank credit, and financial literacy for micro business actors. The government also needs to look at the high VAT of 11 percent, which significantly affects the production costs of MSME players. “For example, banking access, the important thing is that they can get credit disbursed, but is there any education, financial literacy, such as financial management? That is not taught, while MSMEs, every company has not only taxes but also levies in their respective regions,” she said. The government, through the Ministry of Micro, Small, and Medium Enterprises, officially enacted the 0.5 percent Final PPh rule to address the problem of thousands of MSME taxpayers who are indicated to have split their businesses, potentially reducing state revenue. The policy, stipulated in Government Regulation No. 20 of 2026, was designed to create a fairer taxation system while providing business certainty for MSMEs.