Official confirms income tax incentives for MSMEs remain in place

Jakarta (ANTARA) -

The government confirmed that the income tax (PPh) incentive for micro, small, and medium enterprises (MSMEs) remains in place, assuring business owners that there have been no major changes to the sector's tax regulations.

Junior tax counselor at the Central Jakarta Regional Tax Office Monica Christina Panjaitan said the government has made only minor adjustments to enhance fairness and ensure that the tax facility is provided to eligible recipients.

"So far, there have actually been no changes for the MSME sector. However, there have been a few additions. These additions are intended to promote a greater sense of fairness," she said during a discussion at the Jakarta Creative Festival here on Sunday.

She explained that business owners with annual turnover or gross revenue of up to Rp500 million (approximately US$27,752) will continue to be exempt from income tax.

According to her, the provision reflects the government's support for MSMEs so they can continue to grow without being burdened by income tax obligations during the early stages of their businesses.

Panjaitan reminded business owners to record their turnover regularly so they can prove the amount of their gross revenue when utilizing the tax relief.

"Ladies and gentlemen, please do not forget to keep records. Daily and monthly gross revenue must still be recorded to qualify for the MSME facility for businesses with annual turnover below Rp500 million," she said.

Meanwhile, individual taxpayers and sole proprietorships with annual turnover of more than Rp500 million but not exceeding Rp4.8 billion (US$266,423) will continue to be subject to a final income tax of 0.5 percent of their gross revenue.

Panjaitan said the rate is a continuation of the government's policy that previously reduced the final income tax rate for MSMEs from 1 percent to 0.5 percent as a form of support for the business climate.

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Translator: Adimas, Kenzu

Editor: Arie Novarina

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