Tax Matching and Strengthening the Economic Contribution of SMEs

Jakarta (ANTARA) - Micro, small, and medium enterprises (MSMEs) have long been the foundation of the national economy. Data from the Ministry of Cooperatives and SMEs shows that more than 65 million MSME units operate in Indonesia, contributing around 60-61% of gross domestic product (GDP) and absorbing about 97% of the national workforce. In the context of social stability and economic resilience, these figures are not mere statistics but reflect the real structure of Indonesia’s economy, which relies on small businesses. Behind this significant contribution, there is a quite evident disparity in fiscal aspects. Tax revenue from the MSME sector is not yet commensurate with its economic role. Indonesia’s tax ratio has been in the range of 10-11% of GDP in recent years. By comparison, according to OECD data, the average tax ratio for OECD member countries is above 30%, and even some Southeast Asian countries, such as Vietnam and Thailand, record higher ratios than Indonesia. This gap does not entirely reflect low compliance alone. The economy’s still informal structure, uneven tax literacy, and concerns among small business owners about administrative burdens are important factors. The government has actually provided various incentives, including a final income tax rate of 0.5% for MSMEs and exemptions for turnover below certain thresholds. However, incentives alone are not sufficient to build sustainable compliance. In efforts to maintain a balance between encouraging economic growth and ensuring the sustainability of state revenue, tax authorities need new solutions that do not solely rely on increasing rates or expanding the tax base. This is where the urgency of a new approach emerges, namely how to bridge the large economic contribution of MSMEs with a more adaptive tax system, without causing liquidity pressures that hinder business growth. One way is to introduce the tax match collaboration approach, which is a collaborative model that gives MSMEs space to contribute meaningfully first, before their full tax obligations are collected. The spirit of this approach is to help small businesses grow with serious mentoring and guidance, then collect taxes based on performance that is truly visible and verified. In such a scheme, taxes are not eliminated or deferred indefinitely, but their timing is regulated and their form adjusted to align with the business growth phase. The state still receives its due, and business actors do not feel forced to run before they can stand firmly on their own feet. Collaboration Scheme The tax match programme stems from a simple yet important awareness: many MSME actors actually have good intentions to fulfil their tax obligations, but often stumble over complicated administrative burdens and insufficient business capacity. In such situations, taxes are often seen as additional pressure, not as part of the growth process. Therefore, tax match is designed as a collaborative approach that unites various stakeholders, from the Directorate General of Taxes (DJP) of the Ministry of Finance, to the Ministry of Cooperatives and SMEs and the Ministry of Communication and Informatics, along with the business ecosystem, such as incubators, digital cooperatives, and payment platforms. This collaboration is intended not merely to tighten supervision, but to build a safe space for MSMEs to grow in a structured and measurable way. In that framework, MSMEs that join are not immediately positioned as taxpayers burdened with final obligations. They first go through a selection process based on business potential and prospects, then receive comprehensive mentoring, from training, financial record digitalisation, to business governance strengthening.