Heaptalk, Jakarta — The 0.5% income tax policy (PPh) for Micro, Small, and Medium Enterprises (MSMEs) is set to expire in December 2024, as stipulated in Government Regulation (PP) Number 23 of 2018 on Income Tax for Income from Businesses Received or Earned by Taxpayers with Certain Gross Revenue.
Minister of MSMEs, Maman Abdurrahman, announced in a press conference on Wednesday (11/20) that his ministry will propose an extension of the 0.5% income tax policy. He stated that the ministry plans to communicate this proposal with the Ministry of Finance and hold coordination meetings with relevant officials.
However, Maman also emphasized the importance of fostering tax awareness among MSME actors. MSMEs with revenues reaching a particular scale are encouraged to contribute to national development through tax payments.
Maman’s remarks also responded to recent social media discussions about a tax bill of Rp671 million imposed on a milk collector, Pramono, in Boyolali, Central Java. Pramono operates as a milk collector in Boyolali, sourcing milk from 1,300 partner farmers. The milk is cooled and sent to two dairy processing industries. Pramono reportedly delivers 20,000 liters of milk daily to dairy processing industries, with weekly sales reaching Rp1 billion, equivalent to an annual turnover of Rp40 billion to Rp50 billion.
Under Government Regulation 55 of 2022, individual MSME taxpayers with annual revenues of up to Rp500 million are exempt from taxes. As outlined in Government Regulation 23 of 2018, a final income tax rate of 0.5% is imposed only on MSMEs with yearly revenues not exceeding Rp4.8 billion. However, this policy is scheduled to end in 2024.
