Regulations
The government says changes to the final income tax regime are aimed at preventing abuse by larger firms, but business advocates warn the new rules could create fresh challenges for genuine small enterprises.
A buyer pays his bill using the Quick Response Indonesia Standard (QRIS) code at a street foodstall on Jl. Ampera Raya in South Jakarta on Feb. 6, 2021. (Antara/Reno Esnir)
Finance Minister Purbaya Yudhi Sadewa has defended the government's overhaul of tax incentives for micro, small and medium enterprises (MSMEs), saying the changes are designed to stop larger businesses from disguising themselves as small enterprises to continue enjoying a preferential 0.5-percent tax rate."This is not about making things difficult for MSMEs, but about ensuring that MSMEs that have moved up a class pay taxes according to their class," Purbaya said on Monday.
The remarks come amid a debate over Government Regulation (PP) No. 20/2026, which narrows access to the 0.5 percent final income tax (PPh) regime for MSMEs.
