DJP Says New Tax Rules Will Make It Easier for MSMEs to Develop

JAKARTA - The Directorate General of Taxes (DJP) of the Ministry of Finance has once again emphasized the government's commitment to supporting the development of Micro, Small and Medium Enterprises (MSMEs) as one of the main pillars of the national economy.

Through the issuance of Government Regulation (PP) Number 20 of 2026, the government has refined the tax policy which is designed to be simpler, more targeted, and sustainable.

Director General of Taxes at the Ministry of Finance, Bimo Wijayanto, explained that this new regulation aims to provide a wider space for MSMEs to develop, encourage regional economic growth, and open up employment without being burdened by complicated tax administration.

"From the beginning, the government has continued to provide support to MSMEs through the evolution of tax policies, ranging from PP 46/2013 (1 percent tariff), PP 23/2018 (0.5 percent tariff), to PP 55/2022. After a thorough evaluation, PP Number 20 of 2026 is present as an improvement so that government support is more fair and targeted," said Bimo in his statement, Monday, June 8.

To provide a clearer understanding to the public and business actors, the DJP explained the five main points in the latest policy, namely:

● Facilities 0.5 Percent Fixed Tariff Applies

The government ensures that the UMKM Final Tax Facility of 0.5 percent is not removed. The turnover limit that can utilize this facility is still a maximum of IDR 4.8 billion per year. In addition, turnover of up to IDR 500 million per year for Individual Taxpayers is still exempt from income tax.

● Ease of Administration for Certain Taxpayers

Individual taxpayers and PT Perorangan who meet the requirements can still use the final rate of 0.5 percent without time limit. Meanwhile, cooperatives are given similar facilities for four years since they are registered. This policy is expected to help business actors focus more on developing their businesses.

● More Accurate Target Incentives

The government ensures that tax incentives are actually enjoyed by growing MSMEs. In addition, various potential abuses, such as business dissolution or the formation of new entities to avoid normal tax rates, are also anticipated through this rule.

● General Tax is Calculated Based on Net Profit

For business entities such as PTs and CVs that switch from the final tariff to the general taxation mechanism, taxes are not calculated from the total gross turnover. The calculation is based on net profit after deducting allowable operating expenses, so that the move to the general scheme does not automatically increase the tax burden.

● Maintaining the Balance of the Tax System

PP Number 20 of 2026 is designed to maintain a balance between support for MSMEs and the creation of a healthy and fair taxation system. In its implementation, the DJP will carry out supervision, education, and assistance during the transition period so that business actors can adapt well.

Bimo emphasized that this policy not only focuses on regulatory functions, but also places the government as a strategic partner for business actors.

"The government wants to be present not only as a regulator, but as a partner who accompanies the journey of business actors. We want to ensure that our MSMEs transform into businesses that are increasingly strong, independent, and have high competitiveness," he said.

In addition, DJP also appeals to all MSMEs to utilize the education and assistance services available at all Tax Service Offices (KPP) and through DJP's official channels.