BERITA TERKINI
JAKARTA, DDTCNews - The policy on the extension of the final income tax of 0.5% for micro, small and medium enterprise (MSME) entrepreneurs remains uncertain. Most recently, the government proposed a scenario wherein the MSME final income tax would apply without any time limit. This development has captured substantial public attention over the past week.
The indefinite application of the MSME final income tax is planned to cover both individuals and sole proprietorships.
Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, stated that the government is currently drafting a revision to Government Regulation (Gov. Reg.) 55/2022 as a legal basis that stipulates the MSME final income tax scheme.
“The government is in the process of revising Gov. Reg. 55/2022, which, among others, stipulates that the 0.5 final income tax will apply indefinitely to individual MSMEs and sole proprietorships,” he claimed.
Beyond individuals, Susiwijono noted that the government is also working on regulations to update the duration of the final income tax scheme for cooperative MSMEs.
According to him, cooperative MSME entrepreneurs will be eligible to continue enjoying the tax relief in the form of a 0.5% final income tax rate until 2029.
“For cooperative MSMEs, the application of the 0.5% final income tax is extended until the 2029 tax year," Susiwijono added.
On another note, Gov. Reg. 55/2022, now under revision, formerly stipulated a specific time limit for the application of the MSME final income tax. Article 59 of the regulation states that individuals may use the final income tax for a maximum of 7 years; cooperatives, limited partnerships, firms, village-owned enterprises (badan usaha milik desa/BUMNDes in Indonesian)/joint village-owned enterprises (badan usaha milik desa bersama/BUMDesma in Indonesian) or sole proprietorships incorporated by 1 person for 4 tax years; and limited liability companies for 3 tax years.
The policy on extending the MSME final income tax has long been ambiguous. Under the Economic Policy Package on 15 September 2025, the government is set to extend the MSME final income tax for individual taxpayers until 2029. However, no concrete technical regulation has been issued to date as the final details remain under deliberation by the government.
Other news includes public suggestions for the government to reduce the value added tax (VAT) rate from 11% to 8%.
Minister of Finance, Purbaya Yudhi Sadewa, expressed concern that the VAT rate reduction from 11% to 8% could result in tax revenue losses amounting to hundreds of trillions of rupiah.
Before assuming the role of the minister of finance, Purbaya was, in fact, a proponent of lowering the VAT rate to 8%. However, as the state treasurer, he now acknowledges the need for prudence in tax policy decisions.
“Some have suggested reducing VAT to 9% or even 8%. When I wasn’t part of the ministry, suggesting a lower rate of 8% did not pose much difficulty. However, as the minister of finance, I must now consider that every 1% reduction costs us around IDR70 trillion in revenue. That’s a significant loss,” Purbaya remarked.
Before finalizing any policy on the VAT rate, Purbaya highlighted the need for the Ministry of Finance to first conduct a review. In addition, the Ministry of Finance must also assess and evaluate the state’s capacity to collect tax revenues once the system is improved.
Purbaya also revealed plans to overhaul the tax, customs, and excise administration systems in the foreseeable future. He added that the repair of the system could take approximately 6 months, with tangible outcomes expected by early 2026.
In addition to the 2 headline stories, several other noteworthy developments also merit attention this week, including a ban on local governments (pemerintah daerah/pemda in Indonesian) to raise the sales value of taxable objects (nilai jual objek pajak/NJOP in Indonesian) next year, the rejection of a lawsuit pertaining to pension tax and reminders for tax employees to uphold integrity.
The Ministry of Home Affairs (Kementerian Dalam Negeri/Kemendagri in Indonesian) has again prohibited local governments from increasing land and building tax (L&B Tax) assessments or sales value of taxable objects.
Referring to Minister of Home Affairs Reg. 14/2025, which constitutes a reference for the preparation of the 2026 local government budgets (anggaran penerimaan dan belanja daerah/APBD in Indonesian), local governments are to postpone or repeal any regulation related to the implementation of higher rates or sales value of taxable objects increases.
“L&B Tax assessments and sales value of taxable objects increases must take into account public conditions to avoid imposing a burden, specifically for low-income groups," reads the Appendix of Minister of Home Affairs Reg. 14/2025.
The Directorate General of Taxes (DGT) has once again warned taxpayers to be aware of scams impersonating the coretax system.
The DGT clarified that a fraudulent scheme has circulated involving fake download links for the coretax application, whereas no such downloadable app exists.
"Beware of scams! #KawanPajak, don't be deceived by the fake links claiming to be from the DGT's Coretax!" wrote the DGT.
The DGT continues to enhance the quality of tax services and establish sound work ethics as well as a positive mindset across the organisation.
Director General of Taxes, Bimo Wijayanto, urged all tax employees to maintain integrity, professionalism and public service commitment. He stressed that every employee plays a pivotal role in establishing a productive and taxpayer-oriented work environment.
“Not only is the quality of tax services measured by processing speed, but also by sincerity and integrity in assisting taxpayers. Every interaction reflects the core values we uphold as civil servants,” he said.
The Constitutional Court (Mahkamah Konstitusi/MK in Indonesian) has rejected the application for a judicial review challenging the tax provisions on pensions under the Income Tax Law (ITL) as last amended by Law 7/2021 concerning the Harmonisation of Tax Regulations (HPP Law).
Justice Arsul Sani stated that the petitioner in Application Number 170/PUU-XXIII/2025 failed to draft the application with sufficient precision.
“This is evident from the inconsistencies and errors in city statutory provisions for which a judicial review is applied," said Arsul Sani during the pronouncement of the verdict.
Bimo Wijayanto has signed a new regulation stipulating the deactivation of access to the preparation of tax invoices. The regulation refers to the Director General of Taxes Reg. No. PER-19/PJ/2025.
The regulation outlines the provisions on the deactivation of access to the preparation of tax invoices for taxable persons (pengusaha kena pajak/PKP in Indonesian) who do not exercise their obligations pursuant to the provisions. Pursuant to Article 65 paragraph (1) subparagraph b of MoF Reg. 81/2024, the authority to deactivate access to the preparation of tax invoices rests with the director general of taxes.
“The director general of taxes is authorised to deactivate access to the preparation of tax invoices for taxable persons who do not exercise their obligations as taxpayers pursuant to statutory provisions in the field of taxation according to certain criteria,” reads Article 2 paragraph (1) of PER-19/PJ/2025. (sap)
