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Jakarta Post

SMEs start enjoying reduced income tax facility on Wednesday

  • News Desk

    The Jakarta Post

Jakarta   /   Wed, August 1, 2018   /   12:21 pm
SMEs start enjoying reduced income tax facility on Wednesday Taxation directorate general spokesman Hestu Yoga Saksama (JP/Anton Hermansyah)

The government policy to cut the income tax for small and medium enterprises (SMEs) from 1 percent to 0.5 percent has been in effect since July 1, and a tax official has said the facility can be enjoyed starting Aug. 1 on the previous month's sales.

The reduced income tax facility applies to SMEs with maximum annual sales of Rp 4.8 billion (US$332,458).

“The income tax for July sales that will be paid in August uses the 0.5 percent rate,” Hestu Yoga Saksama, the spokesman for the taxation directorate general, said in Jakarta on Tuesday as quoted by kontan.co.id.

Hestu said the Finance Ministry was now drafting a ministerial regulation drawn from Government Regulation (PP) No. 23/2018 that would provide more details and guidance on the technical implementation of the 0.5 percent income tax for SMEs.

“The derivative regulation is not finished, but the reduced income tax can be implemented without any problem,” he said.

Article 9 of PP No. 23/2018 requires a taxpayer to submit a proposal to the taxation directorate general and request a letter confirming the 0.5 percent final tax rate.

The regulation also states that a taxpayer can pay the tax directly or that tax officers can collect the tax.

Earlier, Herman Juwono, the head of the taxation committee at the Indonesian Chamber of Commerce and Industry (Kadin), had welcomed the tax cut for SMEs, but he also suggested that the government free SMEs from paying taxes, like in China, to help SMEs develop quickly. (bbn)