248,275 MSMEs Enjoy IDR 670 Billion Tax Incentives During 2020

Illustration of MSMEs (Photo: Special)

JAKARTA - Director of Counseling, Services and Public Relations at the Directorate General of Taxes at the Ministry of Finance Neilmaldrin Noor said that the realization of the Final Income Tax incentives given to MSMEs throughout 2020 was IDR670 billion.

"This figure comes from 716 industrial classifications that have been set by the government," he said, Wednesday, February 17.

Neilmaldrin added, the incentive in the form of government-borne taxes is expected to increase the capital for MSMEs in running their business.

"Indirectly, this policy also provides a stimulus by increasing the purchasing power of MSMEs," he said.

Furthermore, he explained that in the short term this incentive would shrink taxpayers which resulted in low tax revenues. However, the positive side that can be achieved is that it can maintain the stability of economic growth, productivity and people's purchasing power.

"If we look at the reality, the provision of incentives through the 2020 fiscal policy has proven to be quite capable of providing support to the business world and society in withstanding economic shocks due to the pandemic," he said.

For information, incentives for MSMEs are contained in PMK Number 44 / PMK.03 / 2020 with a derivative of Final Income Tax based on Government Regulation Number 23 of 2018 which states that the UMKM Final PPh incentives are borne by the government.

However, the realization of 2020, which amounted to IDR670 billion, is still far from the country's target of IDR 1.08 trillion. This means that the participation of MSMEs in utilizing this policy is still low, which is only around 62 percent.

As for 2021, the Directorate General of Taxes is said to be more aggressive by expanding the scope of industry classifications from 716 to 725 industries.

"For matters that are reduced in tax revenue incentives, of course we will continue to expand the tax base which is currently untouched through strategies of intensification and extensification, as well as strengthening of databases," he explained.

"So we are pretty sure we can meet the targets set in 2021," said Neilmaldrin.

The government itself through the Ministry of Finance has determined an extension of the tax incentive period for MSMEs until 30 June.