JAKARTA - Finance Minister Purbaya Yudhi Sadewa emphasized that the government would take action against the practice of misuse of tax facilities for Micro, Small and Medium Enterprises (MSMEs), one of the practices that have come under scrutiny is the division of large businesses into several entities in order to remain eligible for the final income tax rate of 0.5 percent.
According to Purbaya, business actors who have developed should no longer rely on tax facilities intended for MSMEs.
He also reminded that efforts to split companies into several business entities to suppress turnover below the specified limit would be easily detected by tax authorities.
"If you get a promotion, that's it. Don't ask for cheap. In fact, you should be grateful. But it's the way it is. The little ones are divided up by the company. Yes, later it will be found out," he told the media at the Danantara Building, quoted Monday, June 1.
The statement was made in response to tax splitting practices, which is a strategy of dividing a business that has grown into several small companies so that each of them still has a turnover of less than IDR 4.8 billion per year, so that business actors can continue to enjoy the UMKM Final Tax scheme.
Purbaya explained that the latest tax system, Coretax, allows the government to monitor ownership relationships and inter-entity transactions more comprehensively, so that the space for carrying out this kind of administrative engineering will be narrower.
"The current tax system, Coretax, is known to everyone. So it can't go forward anymore," he said.
On the other hand, the government officially tightened the provisions for the use of UMKM Final Tax facilities through Government Regulation (PP) Number 20 of 2026.
The new rules change the method of calculating the turnover limit by combining the gross turnover of the personal taxpayer and all the individual companies he or she establishes.
This provision is regulated in Article 57 paragraph (2) letter e PP 20/2026, with this mechanism, if the total combined turnover exceeds Rp. 4.8 billion in one tax year, the taxpayer and all the individual companies owned by him will no longer be entitled to use the UMKM Final Tax rate in the following tax year.
As an illustration, the government cited a taxpayer who runs a communication equipment trading business and has two individual companies, namely when the total turnover of the three entities reaches Rp. 6 billion in one year, they will automatically lose their right to the UMKM Final Tax Facility.
The merger of turnover also applies within the scope of certain families, and for married couples who choose to separate property or carry out tax obligations separately, each of their turnover must still be calculated together, including the turnover of the individual company they establish.
In addition, the income of minors who are not yet adults is also taken into account in calculating the turnover limit, namely in the example given by the government, the total turnover of a family that reaches Rp. 5.5 billion causes the business owned by one of the family members no longer meets the conditions to enjoy the UMKM Final Tax Facility, even though the turnover of the business individually is still below the limit of Rp. 4.8 billion.
Through this policy, the government hopes that the tax facilities for MSMEs can be used in a targeted manner and not used by businesses that have actually grown to a larger scale.
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