WEEKLY TAX NEWS ROUNDUP

Caution! Purbaya Detects MSMEs Splitting Businesses for Low Taxes

Redaksi DDTCNews
Sabtu, 11 Oktober 2025 | 07.30 WIB
Caution! Purbaya Detects MSMEs Splitting Businesses for Low Taxes

JAKARTA, DDTCNews - The issue surrounding the use of the 0.5% final income tax for micro, small and medium enterprise (MSME or usaha mikro, kecil dan menengah/UMKM in Indonesian) entrepreneurs has once again captured public attention. Minister of Finance, Purbaya Yudhi Sadewa, revealed that he would review the alleged practice of ‘business split-off’ undertaken by MSME entrepreneurs to remain eligible for the lower tax rate.

This topic has sparked wide discussion among netizens over the past week.

Purbaya admitted that he had received reports concerning entrepreneurs whose annual turnover exceeded IDR4.8 billion. Read Purbaya to Investigate Split-off Practices by MSME Taxpayers.

“Later, we’ll see. I’ve heard cases where, once turnover reaches IDR4.8 billion, businesses are split in various ways,” stated Purbaya.

Purbaya stressed the need for the government to develop a database to monitor these practices. To develop such a database, he claimed that his ministry would seek cooperation with the Ministry of Law.

“I’ll try to further investigate. We can detect these cases through the database in the coretax or by integrating data with the Ministry of Law,” he added.

However, Purbaya highlighted that this initiative is unlikely to generate a significant increase in state revenues in the short term.

On another note, Coordinating Ministry for Economic Affairs Airlangga, Hartarto, had earlier drawn attention to the practice of business split-off undertaken by entrepreneurs seeking to continue benefiting from the 0.5% MSME final income tax scheme.

According to Airlangga, entrepreneurs have deliberately split their business into multiple entities to avoid the obligation to transition from the MSME final income tax scheme to the general regime.

Airlangga, however, noted that the government would continue to extend the application of the MSME final income tax until 2029, specifically for MSMEs constituting individual taxpayers.

“The tax remains final at 0.5%, but don’t open a [new] store next door and exchange invoices just because turnover has reached IDR 5 billion,” Airlangga cautioned.

Beyond the issue of the split-off by MSME entrepreneurs, several other issues merit attention. These include new provisions on beneficial ownership reporting, frequent tax waivers by local governments, tax revenue realisation still below target and bonus incentives for tax employees.

Below is a full review of the tax articles.

Corporations Required to Report Beneficial Ownership

The Ministry of Law will soon introduce new mechanisms for the beneficial ownership data reporting system.

To date, beneficial ownership reporting has been conducted through a self-declaration pursuant to Presidential Regulation (Pres. Reg.) 13/2018. However, the government now considers the existing scheme ineffective, citing the lack of sufficient verification tools to ensure data accuracy.

“To address this fundamental challenge, we can no longer operate in a partial or sectoral manner. Today marks the beginning of a new era. Under the Minister of Law Regulation 2/2025, we are shifting from the self-declaration paradigm to integrated and collaborative verification,” stated Minister of Law Supratman Andi Agtas.

Local Governments Implement Tax Waiver

PT Jasa Raharja expressed hope that tax compliance will improve in line with the implementation of the motor vehicle tax (pajak kendaraan bermotor/PKB in Indonesian) waiver programmes across several regions.

President Director of Jasa Raharja Dewi Aryani Suzana explained that the motor vehicle tax waiver initiative aims to provide convenience for the public while promoting greater awareness of orderly motor vehicle administration. She highlighted that Jasa Raharja’s regional offices are actively supporting the provincial governments in implementing the motor vehicle tax waiver programmes.

“The relaxation of the motor vehicle tax reflects the concern of both the government and Jasa Raharja for current community conditions. Through this administrative relief, people can promptly settle their tax obligations without feeling burdened,” she remarked.

Tax Realisation Only Reaches 58%

The Directorate General of Taxes (DGT) reported that tax revenues collected from January to September 2025 only stood at IDR1,273.35 trillion.

Compared to tax revenues in the same period in 2024, when tax revenues reached IDR1,354.82 trillion, this year’s realisation indicated a contraction of approximately 6.01%.

“As of the third quarter of 2025, our net tax revenue stands at IDR1,273.35 trillion, equivalent to 58.16% of the total 2025 State Budget target of IDR2,189.3 trillion,” said the Director of Law Enforcement of the DGT, Eka Sila Kusna Jaya.

Taxpayers Registered with Large and Special Tax Offices

Director General of Taxes, Bimo Wijayanto, has issued the Director General of Taxes Regulation No. PER-17/PJ/2025 concerning the Determination of Places of Registration for Taxpayers, Individuals and Entities in Large Taxpayer, Special and Medium Taxpayer Offices.

The regulation sets out the determination of places of registration for individual and corporate taxpayers at Large Taxpayer, Special and Medium Taxpayer Offices. PER-17/PJ/2025 has been released to adjust the provisions after the entry into force of MoF Reg. 81/2024.

“It is necessary to adjust the provisions on places of registration for taxpayers and entrepreneurs through electronic systems and/or places of business reporting for taxable persons at … the Directorate General of Taxes Large Taxpayers Regional Tax Office, … the Directorate General of Taxes Special Jakarta Regional Tax Office and … Medium Taxpayer Offices,” reads the consideration of PER-17/PJ/2025.

Bonuses to Motivate Tax Employees

Minister of Finance, Purbaya Yudhi Sadewa, announced plans to introduce incentives or bonuses for DGT employees who demonstrate outstanding performance and dedication in achieving tax revenue targets.

Purbaya explained that the incentive scheme is intended to enhance work ethic and boost the morale of DGT employees. He noted that employees who consistently deliver strong results deserve appropriate recognition.

“Taxpayers’ complaints can leave tax employees feeling demotivated. That’s why we need both a stick and a carrot. For instance, if their performance contributes to improving the tax ratio, I might propose an incentive programme, so their efforts are better appreciated,” Purbaya said during an appearance on Squawk Box. (sap)

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