Minister Maman Reassures MSMEs That Business Registration Is Unrelated to Tax Collection

Minister of Micro, Small, and Medium Enterprises (MSMEs) Maman Abdurrahman has reassured MSME players that obtaining a Business Identification Number (NIB) is not related to the government’s tax collection efforts. Maman made this assertion in response to concerns among some MSMEs about onboarding into the SAPA UMKM (MSME Service Application System). During the National Entrepreneurship and MSME Day event in Jakarta on Wednesday, Maman said there is still a perception in the community that the obligation to obtain an NIB will automatically make business actors taxpayers. According to him, this perception needs to be corrected so as not to hinder the formalisation process of micro and small enterprises. “I clarify, obtaining an NIB does not mean you are obliged to pay tax. There is no connection,” Maman said on Wednesday, 10 June 2026. He explained that the NIB functions as an identity for business actors, much like a resident identity card (KTP) for citizens, thus making it easier for the government to distribute various programmes and incentives to MSMEs. Possession of an NIB is also a requirement for MSMEs to access various business development opportunities, including financing and export markets. For example, he said, business actors wishing to obtain financing from financial institutions or financial technology (fintech) companies are generally asked to present an NIB as proof of business legality. In addition, an NIB is also needed for business actors who want to expand their markets overseas. The government is encouraging MSMEs to onboard into the SAPA UMKM system, which is being developed as an integrated service ecosystem for business actors. According to Maman, the existence of SAPA UMKM and the NIB aims to facilitate business actors’ access to various government services, not to expand the tax collection base. Maman also affirmed that the government continues to provide various tax incentives for MSMEs. Business actors with an annual turnover below Rp500 million still receive a tax exemption facility or are subject to a zero per cent effective rate. Meanwhile, MSMEs with a turnover below Rp4.8 billion per year remain subject to a final Income Tax (PPh) of 0.5 per cent of turnover.