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Jokowi to Cut MSME Tax to 0.5 Percent

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7 March 2018 17:50 WIB

President Jokowi (second from left) and Finance Minister Sri Mulyani (second from right) during the tax amnesty socialization event on Monday, August 1, 2016. TEMPO/Subekti

TEMPO.CO, Jakarta- President Joko Widodo or Jokowi said the government will lower the final income tax subjected to Micro, Small and Medium Enterprises. The current tax of 1 percent will be cut in half to just 0.5 percent by the end of this month.

"We have held three meetings and if there are no obstacles we will cut the tax to 0.5 percent by the end of this month," he said after attending the opening HIPMI's meeting in Tangerang, Wednesday, March 7.

Read: Govt to Lower Tax Charges for SMEs

Initially, the president said, he wanted to cut the tax down to 0.25 percent. That idea was rejected by Finance Minister Sri Mulyani Indrawati, who said it would affect the state's tax revenue.

Government Regulation No.46/2013 on businesses' income tax based on their gross earnings stipulates that MSMEs are subjected to a 1-percent tax if their turnover exceeds Rp4.8 billion.

According to Jokowi—based on his famous impromptu field visits—MSME actors have always complained about the tax they have to pay.

Ahmad Faiz Ibnu Sani



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