Purbaya: New Regulation on 0.5% Final Income Tax Rate for SMEs to be Issued Shortly

Jakarta, CNBC Indonesia - The latest government regulation (PP) serving as the basis for implementing the 0.5% final income tax (PPh) rate for SMEs has been completed.

Finance Minister Purbaya Yudhi Sadewa stated that the new PP, which revises PP 55/2022, has undergone harmonisation at the State Secretariat Ministry. Only the announcement remains to be made.

“It is being processed and will be issued shortly,” Purbaya said at his office in Jakarta on Tuesday (7/4/2026).

He assured that the new SME final income tax regulation will be released in the first semester of 2026. However, Purbaya could not yet disclose the exact date.

“It’s already finished, and harmonisation is done,” Purbaya remarked.

Previously, the Director General of Taxation, Bimo Wijayanto, said that the revision of the PP regulating the 0.5% final income tax rate for SMEs should have been completed last year and effective this year. However, the process is still ongoing.

“Regarding the SME final income tax, PP 55 is still being processed again this year,” Bimo said at the Tax Class event at the DJP Head Office in Jakarta, quoted on Friday (6/3/2026).

Bimo did not provide further explanation on why the provision needed to be revised again this year, resulting in the new regulation not yet being issued.

However, the Finance Minister’s Special Staff for Tax Compliance, Yon Arsal, acknowledged that this re-revision process caused the implementation of the provision to be delayed, from the original plan of effective 1 January 2026.

“Of course, it was supposed to apply from 1 January 2026.

Because the procedure was a bit late. It turns out there were some administrative procedures that we had to redo,” Yon explained.

Yon clarified that the newly overhauled provision relates to administrative issues in the implementation of the SME final income tax. Once the substantive provisions are finalised, he assured that it will be reviewed again by Finance Minister Purbaya Yudhi Sadewa in the near future.

“The Minister will then approve it, and we will send it back to the Palace for signing. We hope that in the near future it can be expedited for implementation,” Yon stated.

“Because in principle, as announced, it remains applicable. While waiting for the ongoing administrative process,” he emphasised.

For information, the Assistant Deputy for Financing and Investment of Small Businesses at the Ministry of SMEs, Ali Manshur, revealed several updates to the SME final income tax provisions in a panel discussion by IKPI themed “SMEs in the Vortex of Tax Regulations: Simplified or Complicated?”

Through the latest provision, he stated that the government will maintain the 0.5% final income tax rate for taxpayers with turnover up to IDR 4.8 billion per year. However, the subjects are limited to individual taxpayers and sole proprietorships.

Meanwhile, those in the form of CVs, firms, PTs, or village-owned enterprises (BUMDes) can no longer use the 0.5% final income tax scheme, although there is a special exception for cooperatives for four years after registration.