MSMEs Recover, Indonesia Develops

Some time ago, there was a taxpayer I served at the Integrated Service Center (TPT) counter. Let’s call him Mr. Dashing. Mr. Gagah came up to me and sat in the front seat of the counter, he asked, “Madam, can you help me? I’m having a hard time taking care of this.” He handed him an open cell phone containing an email from the Directorate General of Taxes.

It turned out that the email contained an appeal to report the Annual Tax Return (SPT), but Mr. Gagah replied to the email by telling about his financial condition. I helped Mr. Gagah explain the contents of the e-mail, then Mr. Gagah recounted his financial condition which had suffered losses due to the Covid-19 pandemic.

Mr. Gagah has a business in making skewers and stainless steel for grilling. These products are sent to other cities and then marketed in that city. Due to the declining demand, Mr. Gagah did not make any profit, instead he stumbled. He was also forced to repatriate his employees and continue to provide severance pay.

According to Mr. Gagah, although currently many people shop online, there are types of goods that cannot be sold online, one of which is the product he sells. He also admitted that most of the buyers were potential food business actors, while during the pandemic only a few people started businesses.

We feel right that the Covid-19 pandemic has really weakened the economic sector, especially Micro, Small and Medium Enterprises (MSMEs). Not even a few of them closed their business.

Government Role

Citing data on the website of the Investment Coordinating Board, MSMEs have a major contribution to Gross Domestic Product (GDP), which is 61.97% of the total national GDP or equivalent to Rp. 8,500 trillion in 2020. As well as the absorption of labor by MSMEs reaches a large number. in the absorption capacity of the business world in 2020, which is 97%.

Given the importance of MSMEs in driving the economy, the following steps have been taken by the government to “extend the breath” and improve the performance of MSMEs in the midst of the Covid-19 pandemic.

National Economic Recovery Program (PEN)

In addition to efforts to handle the health crisis, the government also carries out the PEN program as a program to protect the impact of the Covid-19 pandemic on the economy.

A number of stimuli have been issued, namely providing assistance to MSMEs, People’s Business Credit (KUR), and one of them by easing the burden on taxpayers by imposing tax incentives for affected MSMEs. This form of stimulus shows the government’s alignment with the lower-middle economic community, especially in the conditions of the Covid-19 pandemic.

Minister of Finance Sri Mulyani at the Press Conference: APBN Kita in September 2021 explained that the utilization of business incentives as of September 17, 2021 had reached Rp. 57.92 trillion, which is 92.2% of the ceiling of Rp. 62.83 trillion. However, this figure includes all tax incentives, specifically the exemption of the MSME Final Income Tax (PPh) borne by the Government (DTP) which has been utilized by 124,209 MSME taxpayers.

HPP Law

Since July 2018 according to Government Regulation Number 23 of 2018 concerning Income Tax on Income from Businesses Received or Gained by Taxpayers with a Certain Gross Turnover, taxpayers with a turnover of less than Rp. 4.8 billion have an obligation to deposit taxes by calculating the gross turnover multiplied by 0.5% rate.

This tariff can be enjoyed for a period of seven years for individual MSME business actors. Unfortunately, in this rule, there is no limit to the tax for MSMEs, so if your monthly income is IDR 4.5 million, you are still required to deposit a Final Income Tax of IDR 22,500 (0.5% x IDR 4.5 million).

This is lame because for employees who have a Non-Taxable Income (PTKP) of Rp. 54 million a year and if the monthly income is less than Rp. 4.5 million, then Article 21 income tax is not imposed.

Recently, there has been a lot of discussion regarding Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (UU HPP). Then, what are the impacts of the HPP Law on MSMEs? Is it beneficial or is it detrimental?

In the HPP Law, starting from the 2022 Tax Year, the obligation to pay Final PPh does not apply to MSME Individual Taxpayers with a gross turnover of up to Rp500 million a year. In other words, new taxpayers will pay taxes at a rate of 0.5% if the cumulative gross turnover exceeds Rp. 500 million.

The new regulation, which is Rp500 million as PTKP for MSME taxpayers, is a breath of fresh air when the Indonesian economy began to climb up after the Covid-19 pandemic.

It can be said that the HPP Law is also a manifestation of the government’s commitment to take sides with people from the lower middle economic class. Through the government’s role in supporting the performance of MSMEs, it is hoped that MSMEs can help turn the wheels of the economy and become even better. Let’s rise and recover together, contribute positively to the country.