It is undeniable that Micro, Small and Medium Enterprises (MSMEs) have contributed to state revenue. This is evidenced by data from the Coordinating Ministry for Economic Affairs, MSMEs in 2021 have contributed to Gross Domestic Product (GDP) up to 61.07% or IDR 8,574 Trillion. On the other hand, the MSME sector also contributes greatly to the Indonesian economy. Where until March 2023, it has more than 64.2 million business units by absorbing 97% of the local workforce. As a tax country, all economic activities will certainly be taxed for the welfare of the Indonesian people. This includes buying and selling activities carried out by Indonesian MSME players. The final MSME Income Tax (PPh) rate is actually another term for PPh Article 4 paragraph 2, whose practice is further regulated through Government Regulation (PP) No. 23/2018. Through this regulation, it is stated that entrepreneurs with certain gross turnover (MSMEs) with a turnover not exceeding IDR 4.8 billion per year are subject to a rate of 0.5%. However, with the occurrence of the Covid-19 pandemic disaster globally since 2020, it has finally prompted the government to create strategies to maintain and boost the country’s economy. Seeing this urgency, Law No. 7 of 2021 or commonly known as the Tax Harmonization Law (HPP Law) was finally issued. The law changes the previous regulation, where specifically for MSMEs with a turnover above IDR 500 million per year will be subject to a final income tax rate of 0.5%. So, what about MSMEs whose income is below IDR 500 million per year? Based on the prevailing HPP Law, MSMEs with annual turnover not exceeding Rp500 million are not subject to the MSME final income tax.
MSME players, don’t forget to pay taxes!
Carrying out tax obligations is proof that MSME actors are obedient taxpayers so that it can facilitate the business process that is being carried out and the value of business credibility increases. Some of the benefits that will be obtained by MSME actors in paying taxes are:
Improving Business Credibility
By paying taxes, MSME players can increase business credibility in the eyes of banks, financial institutions, customers, and partners.
Simplify Administrative Affairs
Currently, there are many administrative requirements that require NPWP such as bank loans, BPJS, passport making, SIUP, and others.
Making Better Business Financial Planning
One of the reasons why entrepreneurs go bankrupt is because some of them cannot manage their business finances. To help facilitate the smooth running of your business, including business tax management and business transactions, leave it to Kontrak Hukum & Bhinneka. Click this link for more information: Ask KH We provide the most complete, easy, and affordable business, financial and tax services, making it easier for you to not have to bother taking care of taxation, as well as avoiding errors in the calculation. Let’s start your business practically and easily together:
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