- MUC Consulting
Final Tax on MSME, Incentive or Disincentive?
Entrepreneurs of Micro, Small, and Medium Enterprise (MSME) become the main target of taxation extensification program this year.
The issuance of Government Regulation Number 23 Year 2018 becomes the policy reinforcement especially for Taxpayers with revenue less than IDR4.8 billion per year. The extra is the final income tax rate that is cut from 1% to 0.5%.
However, the 0.5% final income tax rate is only an option that can be selected by MSME Taxpayers, other than using the normal rate that is stipulated in Article 17 of Income Tax Law.
There are terms and conditions as well as the period that shall be considered by MSME who choose the 0.5% final tax rate. It is because that not all Taxpayers and business types may utilize this cheapest tax facility.