Fair Taxes in favor of the Little People

“I want to pay taxes, ma’am. Asking for a bill to be made, here are the notes,” said a man who was at the helpdesk counter of a Tax Service Office (KPP).

As a tax employee in charge of consulting services, the author often meets a typical taxpayer like this, coming to the tax office to ask for a billing code to be made. Usually they are people who are elderly or less versed in technology.

A paper with pen writing, showing a record of the taxpayer’s gross income and the taxes they have to pay. There is not much Income Tax (PPh) payable, usually only between Rp. 20,000.00 to Rp. 100,000.00. Their business is still relatively small.

Some have small stalls at home, as well as traveling food vendors. Although their income is not much, but they still try to obey paying taxes. Taxpayers like them are commonly referred to as MSME Taxpayers.

Taxes for MSMEs

The government pays great attention to MSME taxpayers. We can see this through several regulations and policies that have been issued by the government. At least the government has issued four regulations that pay attention to the interests of MSME taxpayers. Let’s see together.

Government Regulation Number 46 of 2013

In order to provide convenience in calculating taxes and reducing administrative burdens, the government issued Government Regulation Number 46 of 2013 (PP 46) concerning Income Tax on Income from Businesses Received or Gained by Taxpayers With Certain Gross Circulation.

This regulation regulates the imposition of Final PPh at a rate of 1% for MSME Taxpayers with a certain gross turnover. This regulation came into effect in July 2013. With this regulation, it is easier for taxpayers to calculate taxes because they only need to record their gross turnover every month. Then the tax calculation is also charged in the final every month.

However, this regulation is still considered burdensome for taxpayers, especially for entrepreneurs with small profit margins. According to them, the taxes paid are not commensurate with the profits or profits they get. For example, a taxpayer who has a gross turnover of Rp. 100 million a month, with a profit of only Rp. 5 million, must pay an Income Tax of 1% of the gross turnover of Rp. 1 million.

Government Regulation Number 23 of 2018

To perfect the provisions for PPh for MSMEs, the government issued another Government Regulation Number 23 of 2018 (PP 23) as a substitute for PP 46 above. There are several things that have been improved in this regulation, among others, the reduction of the Final PPh rate to 0.5% and the application of a certain period of time in this regulation.

The regulation of the application of a certain period of time is intended as a learning period for new taxpayers who are not ready to carry out bookkeeping so that they can calculate taxes more easily. After the end of the period, it is hoped that the taxpayer is ready to carry out bookkeeping and can calculate income tax at the general rate.

Another thing that is improved in this regulation is the freedom for MSME taxpayers to choose to use the calculation at the usual general rate, if the taxpayer is able to do the bookkeeping and also if the taxpayer feels burdened with the amount of tax if it is calculated at the final PPh rate. This arrangement reflects that the government wants to provide justice to taxpayers.

Then has PP 23 really provided justice for taxpayers?

Government-borne Final PPh Incentives (DTP)

The Covid-19 pandemic that has hit our country has had an enormous impact on the economy, including these MSME entrepreneurs. To help them, the government issued a policy on tax incentives for taxpayers affected by the Covid-19 pandemic.

One type of incentive provided is the DTP Final PPh incentive for MSME taxpayers. Taxpayers do not need to pay Final Income Tax but must report the realization of incentives instead. Some taxpayers take advantage of this incentive, but there are still many who do not.

In addition to reasons of ignorance, there are also taxpayers who feel that the procedure for obtaining this tax incentive is too complicated. Especially for taxpayers who are less tech-savvy. Let alone reporting online, they can’t even make a billing code.

This tax incentive policy does not seem to be able to reach all taxpayers. In addition, this policy is also only temporary because it is related to the COVID-19 pandemic.

Law Number 7 of 2021

The most recent policy issued by the government is the regulation on certain gross circulations that are exempt from taxation. The policy is regulated in Chapter III Article 7 paragraph (2a) of Law Number 7 Years