Minister Maman Ensures 0.5 Percent Income Tax Extended Until 2025

Minister of MSMEs Maman Abdurrahman (photo; Maria Trisnawati/VOI)

JAKARTA - Minister of Micro, Small, and Medium Enterprises (MSMEs) Maman Abdurrahman confirmed that the validity period of the 0.5 percent final income tax for MSMEs ending in 2024 has been extended by one year until 2025.

"The extension of the 0.5 percent income tax (PPh) for one year is for MSMEs that have received this incentive for seven years, so it is still given an extension of one more year to eight years," said Maman Abdurrahman in the Press Conference on the Economic Policy Package for Welfare quoted on Tuesday, December 17.

Meanwhile, for MSMEs that have only been running incentives for two years, he continued, they still have a time span of five years left. Likewise, for MSMEs that have only been running the 0.5 percent income tax incentive for one year, they will still get it for the next six years. This means that apart from those ending in 2024, the 0.5 percent income tax will remain valid for seven years.

"Hopefully, after being given incentives for seven years, MSME entrepreneurs can move up a class and grow to be more independent," he said.

Maman emphasized that in addition to the extension of 0.5 percent PPh, the PPh exemption policy for MSMEs with a turnover of less than IDR 500 million will also be continued.

"For MSMEs with a turnover of less than IDR 500 million, they are subject to 0 percent PPh, or are not burdened at all, for example street vendors, warteg, and so on," explained Maman.

Meanwhile, Maman believes that of the total Value Added Tax (PPN) exemption incentive of IDR 265.5 trillion in 2025, around 90 percent will be enjoyed by MSMEs.

Maman gave an example, first related to the exemption of VAT for basic necessities such as rice, corn, sugar, and so on, to the exemption of VAT for fishery and marine products. Where according to Minister Maman, most MSMEs engaged in these fields will feel the incentives.

Second, related to the 50 percent electricity discount for two months in 2025 given by PLN for 450-2200 VA power.

"Like (incentives) electricity from PLN, most of our MSMEs still use electricity with low power," said Maman.

Maman emphasized that the various incentives are a form of affirmative action from the government to secure the MSME sector.

"All of this is aimed at encouraging the growth and development of our MSMEs, because we are very aware that in order to achieve 8 percent economic growth, MSMEs are one of the sectors that can support this growth," said Maman.