Luhut Pushes MSME Data Integration to Broaden Tax Base
JAKARTA, DDTCNews - Chairperrson of the National Economic Council (Dewan Ekonomi Nasional/DEN in Indonesian), Luhut Pandjaitan, is pushing for the integration of data on micro, small and medium enterprise (MSME) entrepreneurs to strengthen data collection and broaden the tax base.
Luhut said the government needs more accurate MSME data to distribute various incentives more precisely. One way to achieve this is to encourage MSME entrepreneurs to register to obtain various government incentives.
"MSMEs are claimed to number nearly 70 million. But the other day, I asked Minister Maman [Minister for MSMEs, Maman Abdurrahman], 'Do you already have the data or not?' He said, 'We don't have the data yet, Sir.' Well, I said, just announce that all MSMEs should register to receive incentives from the government," he said, as quoted on Tuesday (4/8/2026).
Luhut noted that the incentives provided by the government may take the form of tax facilities, financing and other forms of support.
One tax facility that MSMEs have long utlised is the final income tax at a rate of 0.5%. This scheme applies to taxpayers with a maximum turnover of IDR4.8 billion as regulated under Gov. Reg. 20/2026.
In addition, there is a non-taxable turnover facility of IDR500 million for individual taxpayers.
According to Luhut, integrated MSME data collection will facilitate the government in monitoring the utilisation of incentives more precisely whilst also tracking business development.
"Once they register, they will be registered with the tax authority. As such, they can no longer escape [if their turnover reaches] IDR4.8 billion or more to avoid paying tax," he claimed.
Luhut added that broadening the tax base from the MSME sector may potentially increase state revenue. The more business entrepreneurs enter the tax system, the greater the potential state revenues.
"You can imagine if, out of 70 million or 65 million, some number could gradually register; 30 million, 40 million or 50 million taxpayers. You can imagine how substantial the state revenue would be, to the point where we are also thinking about how we might reduce taxes in the future," he added. (dik)
