Indonesia: Govt to Lower Tax Charges for SMEs

• Sep 04, 2017

TEMPO.CO, Jakarta – The government continues to prepare for lowering tax charges for micro, small and medium-sized enterprises (SMEs) from 1 percent to 0.25 percent. Suahasil Nazara, head of Fiscal Policy Agency, the Finance Ministry, said that the government will carry out an evaluation to boost tax compliance of small businesses.

The Finance Ministry has included the planned revision to SMEs taxation in the financial note and the 2018 state budget (APBN). Suahasil said that the plan covers items subject to tax.

The Government Regulation No. 46/2013 holds that SMEs with over Rp4.8 billion revenue are subject to 1 percent tax rate.

Earlier, the Cooperatives and Small and Medium-Sized Enterprise Minister Anak Agung Gede Ngurah Puspayoga said that businesses feel burdened by the tariff. Soeprapto, the Ministry’s assistant deputy for non-bank financing and taxation, said that the taxable income are not proportional with their expenses and net profit. SMEs are very vulnerable to suffering losses in a short period of time.

The Ministry reports that only 397,000 out of 59 million SMEs submit their annual tax returns. The business sector paid Rp47 trillion in income tax and value added tax. “If it was easier, SMEs will be more compliant,” Soeprapto said.

Source: https://en.tempo.co/read/news/2017/09/04/056905696/Govt-to-Lower-Tax-Charges-for-SMEs