Tax Office Reveals Scheme of Splitting Businesses to Enjoy 0.5% MSME Tax Rate
Jakarta (ANTARA) - The Directorate General of Taxes (DJP) at the Ministry of Finance has revealed a practice of splitting businesses by establishing multiple limited liability companies (PT) and commanditaire vennootschaps (CV) in order to continue enjoying the 0.5 percent final income tax facility for micro, small, and medium enterprises (MSMEs).
Director of Counselling, Services, and Public Relations (P2Humas) at DJP, Inge Diana Rismawanti, stated that her office has identified a pattern where business operators establish new entities when their company’s turnover approaches a certain limit.
“For example, we observe taxpayer trends. When a PT is registered, its turnover rises. By the third year, its turnover begins to decline. Then a new PT appears. The same goes for CVs,” Inge said during a discussion held by the Ministry of MSMEs in Jakarta on Wednesday.
Based on DJP data, there are 14 individuals who own more than 50 companies in the form of PTs or CVs. Additionally, DJP found around 45 individuals who own between 26 and 50 business entities in the form of PTs and CVs.
Under tax regulations, individual MSME taxpayers receive a tax exemption for turnover up to Rp500 million per year. Meanwhile, turnover above Rp500 million up to Rp4.8 billion is subject to a final income tax rate of 0.5 percent.
However, DJP has found indications that some business operators are establishing new entities so that each entity’s turnover remains below the Rp4.8 billion threshold and can continue to utilise the lower MSME final tax rate.
Inge noted that for CVs, turnover tends to increase from the first year to the fourth year. However, after entering the fifth year, the company’s turnover declines and then a new CV emerges.
She said these findings became one of the government’s considerations in changing the provisions for granting the MSME final income tax rate facility.
“This is what actually makes us question why they are not proud to move up in class. They should be proud to move up in class. Perhaps later their turnover could become even larger, rather than remaining micro or small,” she said.
Therefore, Inge stated that the government, through Government Regulation (PP) Number 20 of 2026, will no longer provide the MSME final income tax rate facility to business entities in the form of PTs and CVs. However, the facility will still be granted to individual taxpayers who meet the requirements.