BERITA TERKINI
JAKARTA, DDTCNews – To date, taxpayers are anticipating the certainty of the extension of the 0.5% MSME final income tax utilisation period. The delay is due to the absence of technical regulations, which has kept this issue in the limelight across national media over the past week.
Despite the lack of regulation, the Directorate General of Taxes (DGT) claims that the government remains committed to extending the MSME final income tax utilisation period.
According to DGT Director of Tax Dissemination, Services, and Public Relations Dwi Astuti the validity period of the final MSME income tax incentive for individual taxpayers will be extended as per the statement by the Minister of Finance Sri Mulyani Indrawati.
“The regulation related to this issue is currently being formulated,” she stated.
Nevertheless, the DGT has yet to issue further instructions pertaining to measures to be undertaken by individual taxpayers who have taken advantage of the MSME final income tax for the seven-year period from 2018 to 2024.
For instance, in the case of MSME individual taxpayers who have utilised the final income tax since 2018, it remains unclear whether they may continue to remit MSME final income tax of 0.5% on the fraction of turnover exceeding IDR500 million while the regulation formalising the extension of MSME final income tax has not been updated. The DGT has not offered clarification on this matter.
Referring to Article 7 of the Minister of Finance Regulation (MoF Reg.) No. 164/2023, MSME taxpayers are required to remit final income tax monthly no later than the 15th of the following month after the taxable period ends.
The obligation to remit MSME final income tax for individual MSME taxpayers arises once their cumulative turnover in a tax year surpasses the non-taxable threshold of IDR500 million.
On another note, the government has promised to extend the utilisation period of the MSME final income tax scheme for individual taxpayers who have employed such a scheme since 2018. This commitment has been conveyed since late last year. However, the necessary underlying government regulation for the policy has yet to be issued.
Although an extension has been agreed upon, Sri Mulyani previously stated that the 0.5% MSME final income tax scheme, in effect since 2018, would be subject to evaluation.
This tax incentive remains unchanged—except that the final income tax facility is under evaluation. We are assessing whether the facility is still necessary, or if MSMEs have reached a level of capacity where they can be treated more equitably," she said during a meeting with Committee IV of the Regional Representative Council (Dewan Perwakilan Daerah/DPD in Indonesian) in September 2024.
Sri Mulyani elaborated that the current MSME final income tax scheme may not fully epitomise fairness for MSMEs. This is because, under this scheme, taxpayers are required to pay taxes based on turnover instead of net profit. As a result, the MSME final income tax may potentially impose an excessive tax burden on MSMEs.
“This does not 100% reflect fairness. A taxpayer might have a turnover of IDR 600 million—above half a billion—but on account of substantial costs, they’re only breaking even or even operating at a loss. Yet, they remain required to pay taxes. That’s not fair,” stated Sri Mulyani.
Beyond the discussion on the final MSME income tax, several other noteworthy topics also deserve attention, inter alia, the performance of tax revenues in March 2025, updates on import tariff negotiations between Indonesia and the United States (US), the performance of annual tax return filing and lawsuits concerning attorney requirements in the Tax Court.
In principle, the extension of the 0.5% final income tax validity period applies through the 2025 tax year for MSME individual taxpayers who have used the scheme for seven years, ending in 2024.
Taxpayers are allowed to calculate net income using deemed profit (Norma Penghitungan Penghasilan Neto/NPPN in Indonesian) and maintain recording provided that they notify the DGT within the first three months of the relevant tax year.
Further, if the final MSME income tax utilisation period is officially extended, insofar as the taxpayers do not submit the notification declaring their option to be subject to income tax based pursuant to general provisions on income tax, they may continue using the provisions under Gov. Reg. 55/2022 (Article 5 of MoF Reg. 164/2023).
The government reported tax revenue realisation of IDR322.6 trillion as of March 2025, equivalent to 14.7% of the target of IDR2,189.3 trillion.
This figure reflects a contraction of 18.1% (year-on-year/yoy). However, the Minister of Finance Sri Mulyani Indrawati noted that tax revenue performance has shown signs of recovery.
“In March, our gross tax revenue has turned around. It dipped by 13% in January, and down 4% in February, now it’s climbed by 9.1%,” she said.
The government has announced plans to review the relaxation of Local Content Requirements (LCR or Tingkat Komponen Dalam Negeri/TKDN in Indonesian) for goods originating from the United States (US).
Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the potential LCR relaxation would be part of Indonesia’s negotiating package in response to the US policy on reciprocal import duty. He also noted that the LCR relaxation may apply to products in sectors such as information and communication technology (ICT).
The government intends to pursue diplomacy and negotiation to address the US reciprocal tariffs. Through diplomacy, a mutually beneficial solution is expected for both countries.
An applicant named Zico Leonard Djagardo Simanjuntak filed a petition for judicial review of Article 34 paragraph (2) subparagraph c of Law 14/2002 concerning the Tax Court to the Constitutional Court (Mahkamah Konstitusi/MK in Indonesian).
Article 34 paragraph (2) subparagraph c of the Tax Court Law authorises the minister of finance to determine additional requirements that must be fulfilled to serve as an attorney in the Tax Court. Currently, the attorney requirements are stipulated under MoF Reg. 184/2017.
“With the regulation of the attorney requirements being stipulated under the MoF Reg., this not only provides the Ministry of Finance with the flexibility to regulate attorneys practicing in the Tax Court but also raises significant concerns—in particular, as tax cases frequently involve parties from the Directorate General of Taxes (DGT) and Directorate General of Customs and Excise (DGCE) that are both under the Ministry of Finance," the applicant argued in his petition, as uploaded by the Constitutional Court.
As of 11 April 2025, at 11.59 Western Indonesian Time (Waktu Indonesia Barat/WIB in Indonesian), the DGT recorded that 12.82 million taxpayers have filed their 2024 annual tax returns.
This figure comprises 12.44 million annual tax returns for individual taxpayers and 373,000 annual tax returns for corporate taxpayers.
“[This figure] represents 79.08% of the 2025 annual tax return compliance target, set at 16.21 million annual tax returns,” DGT Director of Tax Dissemination, Services, and Public Relations Dwi Astuti stated. (sap)
