The UMKM Tax Rates 0.5 Percent Immediately Apply, These Are Full Leaks

The reduction of the final income tax rate (PPh) for Micro, Small and Medium Enterprises (MSMEs) with a net income of Rp 4.8 billion per year, including co-operatives is immediately enforced. The government cut the UMKM tax from 1 percent to 0.5 percent of the amount or value of gross circulation for one year to a maximum of Rp 4.8 billion.

“The draft Government Regulation (RPP) has arrived at the final stage. So from the various harmonization meetings attended by several agencies such as the Ministry of Finance, the Fiscal Policy Agency, the Directorate General of Taxation, the Ministry of Cooperatives and SMEs and the MSME Association, the new final PPh rates stated in the RPP is 0.5 percent, “said Deputy for Financing of the Ministry of Cooperatives and SMEs Yuana Sutyowati Barnas in a written statement in Jakarta on Sunday (06/06/2018).

Kemenkop and SME before the letter of the Minister of Cooperatives and SMEs in 2017 proposed that the final tax rate through PP number 46 2013 which is considered burdensome can be reduced to 0.25 percent. The revision has been agreed and just waiting for the signature of President Joko Widodo (Jokowi) so that it may be enforced in the near future.

“Later there will be significant changes in the regulation, including a reduction in final PPh rates (MSME taxes) from 1 percent to 0.5 percent on turnover, second, the application of final income tax is limited in time,” he said.

Yuana further explained that the RPP also mentioned a sunset policy for taxpayers (WP) using this final rate, ie four years for certain WP agencies (cooperatives, CVs and firms), three years for WP Limited Liability Company (PT), and seven years for individual WP.

Through the policy of sunset clause or the time limit of taxation, the Ministry of Cooperatives and SMEs encourage the perpetrators of MSMEs to be more orderly bookkeeping and educating themselves to orderly preparing financial statements.

“So, after the deadline arrives, WP may carry out bookkeeping and carry out obligations under the general regime or normal tax according to Law Number 36 Year 2008 regarding Income Tax, referring to Article 17,” he said.

The RPP also provides flexibility for MSMEs who are losing money to use a normal tax mechanism by submitting financial statements at the time of reporting the Annual Tax Return, with a compensation mechanism for 5 years. However, for the following years the concerned MSMEs must consistently use the normal tax rate.

Yuana did not deny that the sunset clause will reap various responses, especially from SMEs. However, he considered, sunset clause policy as a learning tool for Individual WPs and Agency WPs, so that it can gradually carry out bookkeeping in an orderly manner.

Because, bookkeeping and financial recording in business processes is a must as part of financial management, among others, can be used as one of the requirements for applying for loans to banks.

“This spirit is positive. In a sense, given time and ultimately MSMEs are gradually expected to have the ability to perform financial records according to accounting standards. The bookkeeping system is one of the needs to improve the performance of SMEs. ”

On the other hand, Yuana stated with the enactment of sunset clause, it is expected that the government can support through training and mentoring of UMKM in preparing financial report, as well as advocacy and understanding of obligation to pay tax.

“The deadline (sunset clause) gives UMKM the freedom to choose the final or normal tax system. During the sunset clause, the government in parallel should also carry out training and assistance with the support of APBN and APBD. The program is expected to increase the contribution of tax payments from MSMEs, “he explained.

Based on data from the Central Bureau of Statistics (BPS), in 2016 the number of UMKM in Indonesia reached 59.7 million which is dominated by micro business actors.

“Therefore, it is expected to increase synergy between related agencies at the central and regional levels for capacity building of UMKM human resources in administration and bookkeeping, and awareness to pay taxes,” he said.


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