Purbaya Explains Why Influencers and Artists Can No Longer Benefit from 0.5% MSME Income Tax

Finance Minister Purberya Yudhi Sadewa has explained the reasoning behind why certain professions, such as influencers, sculptors, and artists, can no longer utilise the 0.5% MSME Final Income Tax rate. This policy stems from the classification of these professions under the ‘independent profession’ category, which follows a different taxation scheme compared to small-scale trading or industrial businesses.

Purbaya emphasised that this measure was implemented to ensure fairness across all taxpayers. He noted that while traditional MSMEs automatically qualify, the nature of influencer work does not fit the same criteria. Furthermore, he stated that limited liability companies (PT) can no longer utilise the MSME Final Income Tax rate, though they may access a 5% Final Income Tax rate if they maintain MSME status. He added that as businesses scale up, they should embrace the transition rather than seeking minimal tax burdens.

Under the Net Income Calculation Norm (NPPN) scheme, influencers and artists are still provided with simplified methods to calculate net income without the need for complex bookkeeping, provided their annual gross turnover remains below Rp4.8 billion.

According to existing regulations, the 0.5% Final Income Tax is governed by Government Regulation (PP) Number 55 of 2022. While individual taxpayers with gross turnovers below Rp4.8 billion can use the 0.5% rate, there are specific exceptions for income derived from services related to independent professions.

The time limit for using the 0.5% Final Income Tax rate has been in place since 2018 via PP 23/2018. For individual taxpayers, the maximum period for using this rate is seven years. Consequently, those who have utilised this facility since 2018 will see their eligibility expire in the 2024 tax year, requiring them to transition to standard rates starting in 2025. However, because influencers and artists are categorised as independent professionals from the outset, they are regulated as being ineligible for the MSME Final Income Tax scheme if their income is derived purely from professional expertise.