Half Percent in a Bowl of Chicken Noodles

Did you know that everyone can contribute to tax revenue? How to? Quite simply, by buying products from micro, small and medium enterprises (MSMEs), we could be contributing 0.5% of the price of MSME products. How come?

Well, I’m wishing for this country. If the Covid-19 pandemic had passed, the tax incentives for MSMEs would no longer exist. Every time I eat a bowl of chicken noodles, it comes to my mind about the 0.5% tax in accordance with Government Regulation of the Republic of Indonesia Number 23 of 2018 concerning Income Tax on Income from Businesses Received or Obtained by Taxpayers with Certain Gross Circulation (PP 23 Years). 2018).

The tax rate under this rule is 0.5% of gross turnover. However, not all taxpayers (WP) can take advantage of this rate. Taxpayers who are entitled to use a rate of half a percent of gross turnover are micro, small and medium enterprises. This half percent tax rate is the final income tax rate (PPh).

Who pays? Every business actor who has a Taxpayer Identification Number (NPWP) whose business circulation for one year is less than Rp. 4.8 billion. So, if we buy MSME products and the seller has a TIN, their gross income will automatically increase, right? Then if they pay taxes, we indirectly help the state collect tax revenues.

The government establishes the definition and criteria for MSMEs through the Law of the Republic of Indonesia Number 20 of 2008 concerning Micro, Small, and Medium Enterprises. Micro-enterprises are productive businesses owned by individuals and/or individual business entities. The criteria for this business are having a net worth of at most Rp. 50 million, excluding land and buildings for business premises, and annual sales of at most Rp. 300 million.

Small business is a productive economic business that stands alone, which is carried out by individuals or business entities that are not subsidiaries or branches of companies that are owned, controlled, or become a direct or indirect part of a medium or large business. The criteria for this business are having a net worth of more than Rp. 50 million to Rp. 500 million, excluding land and buildings for business premises, and having annual sales of more than Rp. 300 million to Rp. 2.5 billion.

Medium-sized business is a productive economic business that stands alone, which is carried out by individuals or business entities that are not subsidiaries or branches of companies that are owned, controlled, or become a part either directly or indirectly with small businesses or large businesses. The criteria for this business are having a net worth of more than IDR 500 million to IDR 10 billion, including land and buildings for business premises, and having annual sales of more than IDR 2.5 billion to IDR 50 billion.

So remember about the fanfare to support and shop at MSME actors. This is a sign of how important the role of MSMEs in this country. Based on data from the Central Statistics Agency (BPS), the MSME sector has a very large contribution to Indonesia’s Gross Domestic Product (GDP), reaching 60%.

A large GDP value indicates that economic resources are also large, and vice versa. Based on BPS data, the number of MSME actors in Indonesia is 64.2 million or 99.99% of the total business actors in Indonesia. It is conceivable that if all 64.2 million MSMEs have a TIN, they will contribute 0.5% each month to state revenues.

Then I imagine that all SMEs or as many as 64.2 million are chicken noodle traders. For example, as many as 64.2 million MSME actors are able to sell 200 bowls of chicken noodles every month, then 12.840.000.000 bowls of chicken noodles are sold. Assume that the price of chicken noodles per bowl is Rp. 10 thousand. So that the total gross income of chicken noodle SMEs is IDR 128.4 trillion.

If all MSMEs have a TIN and carry out their tax obligations of 0.5%, the tax paid from MSME actors if added up is Rp. 642 billion per month. If it is annualized, they can contribute IDR 7.7 trillion to state revenue.

Based on data from our 2021 State Budget, the target for tax revenues is IDR 1,229.6 trillion. From my calculations above, the MSME tax can contribute around 0.7% of the revenue target. Small? Certainly not. Tax revenue is said to be 100% if it is even Rp1,229.6 trillion.

Please keep in mind that this is just my assumption. If we encourage MSME business actors and all MSMEs contribute to tax revenue, the tax money will be collected and the state will be able to finance the country’s needs. This assumption is also if all MSMEs are business actors who sell chicken noodles. In fact, not all SMEs sell chicken noodles. It could be that tax revenues will be even greater.

With my assumption, the cycle will run, there are sellers, there are buyers, there are taxes paid, and there are taxes spent on the people. All contributed. The flow of money went smoothly.

Ah if everyone understood about taxes and their benefits, how beautiful this country would be. Every need of the community can be fulfilled and state debts are paid off. Just imagine, by eating a bowl of chicken noodles we can contribute tax revenue to the state. Even though I didn’t pay for it.

Of course, accompanied by people who are trustworthy in this country. Not only the people who contribute, but the apparatus should not become assholes. Let’s contribute to tax revenue because our taxes are for us.