DJP Overhauls 0.5% Final Income Tax Rate for UMKM

Jakarta, CNBC Indonesia – The government has not completed the process of revising the final income tax regulations for UMKM, PPh Final UMKM, which have been governed under Government Regulation (PP) No. 55 of 2022. Director General of Taxes Bimo Wijayanto said the revision of the PP governing the 0.5% PPh Final UMKM was supposed to be completed last year and come into force this year. However, the process is still ongoing. “Regarding PPh Final UMKM, PP 55 we are still revising this year,” Bimo said at a Tax Class event at the DJP Head Office, Jakarta, quoted Friday (6/3/2026). Bimo did not elaborate further on why the provision had to be revised again this year, delaying the publication of the new regulation. However, Yon Arsal, Senior Expert Staff to the Finance Minister on Tax Compliance, acknowledged that this revision process has caused the implementation to fall behind, from the original plan for it to take effect on 1 January 2026. “Of course because it should have been in effect on 1 January 2026. Because the procedures were somewhat late. It turns out there are several administrative procedures that we redo,” Yon said. Yon explained that the newly revised provisions relate to the administrative issues of implementing PPh Final UMKM. After the elements of the provision are corrected, he assured it will be promptly reviewed again by Finance Minister Purbaya Yudhi Sadewa in the near future. “The Minister will then be okay and we will send it to the Palace again for signing. We hope soon that it can be enacted,” Yon said. “Because, in principle, as announced, it has in fact already been in force as well. While the administrative process continues,” he emphasised. For information, Assistant Deputy for Financing and Investment of Small Businesses at the Ministry of UMKM, Ali Manshur, in a panel discussion organised by IKPI on the topic ‘UMKM in the Orbit of Tax Regulation: Simplified or Complicated?’ disclosed a number of updates to the PPh Final UMKM provisions. Under the latest provisions, he said the government would maintain the final tax rate of 0.5% for taxpayers with annual turnover up to Rp4.8 billion. However, the subject is limited to individual taxpayers and single-owner companies. For entities in the form of CVs, firms, PTs, and BUMDes, the 0.5% final PPh scheme can no longer be used, although there are special exemptions for cooperatives for four years after registration. (arj/mij) Add as a preferred source on Google [Gambas:Video CNBC]