Video: MSME Minister Reveals Strategies and Challenges to Strengthen Indonesian MSMEs

The Minister of MSMEs, Maman Abdurrahman, has emphasised the importance of legal certainty and regulations for the development of MSMEs in Indonesia. Consequently, the government, through the issuance of Government Regulation (PP) Number 20 of 2026, is adjusting the final Income Tax (PPh) policy for micro, small, and medium enterprise (MSME) actors.

For MSMEs with an annual turnover below Rp 4.8 billion, they are entitled to utilise a final MSME income tax rate of 0.5%. However, MSMEs with a turnover below Rp 500 million can benefit from a 0% income tax rate.

In addition to incentives, MSME protection is being pursued by safeguarding the entire supply chain, including suppressing the circulation of illegal imported products, such as those from China. The Ministry of MSMEs and the Ministry of Industry are collaborating to strengthen the oversight system for imported products on e-commerce platforms while simultaneously improving product quality.

On the other hand, the Ministry of MSMEs has noted the positive performance of MSME businesses that have successfully scaled up to enter the global market. Through the SAPA MSME application, the government is encouraging the use of Artificial Intelligence (AI), product education, and training for MSME entrepreneurs, alongside providing access to financing to drive business growth.

Maman Abdurrahman also noted that the vast number of MSMEs, reaching 57 million, and the need for integration between central and regional systems, remain significant challenges in strengthening Indonesia’s MSME sector.