pro-visioner.com – Digitalization Drives MSME Progress and Tax Awareness, Provisio Group participated with 40 other speakers in the SME Taxation Management in Digital Era Class titled Implications of MSME Taxation, at MULA Building, Kota Tua, Jakarta (16/8). This class is part of the Indonesian Entrepreneur Festival (FEI) 2022 series organized by Indonesia Prima and Womenpreneurs Indonesia Network.
The SME Taxation Management in Digital Era class was moderated by Tax Magazine Coordinator Ruruh Handayani and began with a presentation from Senior Manager Compliance Division PT Pro Visioner Konsultindo Daniel Wijaya. Daniel said, MSMEs are micro, small, and medium enterprises with free and independent business types. This definition is stipulated in Law No. 20/2008 on Micro, Small, and Medium Enterprises. Based on data from the Ministry of Cooperatives and Small and Medium Enterprises (Kemenkop UKM), the number of MSMEs in Indonesia reached 64.2 million with a contribution to Gross Domestic Product (GDP) of 61.07 percent or Rp 8,573.89 trillion. Thus, the role of MSMEs is important, so they must continue to be developed comprehensively. The current development of MSMEs must begin with the awareness of business actors and the government to optimize the digitalization trend.
“The Covid-19 pandemic has created a positive angle, many MSMEs are developing with digitalization. MSMEs must utilize social media to develop their business, attract products and services. From our observations, culinary MSMEs, the products used by the community are like fashion. For example, there is Sushi from Japan. In Indonesia, it can be mixed into a Sushi Burger. There is also Ketoprak mixed with noodles,” said Daniel.
However, the fundamental thing that entrepreneurs need to have is to know the basics of business, starting from the purpose of establishment, target market, goods/services to be sold, tastes or characteristics to be offered, to the calculation of profit and loss.
“Once the basics are understood and implemented, digitalization will accelerate the branding of MSMEs throughout Indonesia, even globally,” added Daniel.
The development of MSMEs should be in line with their contribution through taxes. As is known, around 80 percent of Indonesia’s state revenue comes from taxes. This tax revenue is the government’s capital to build infrastructure, empower MSMEs, and provide fiscal incentives.
One of the government’s efforts to consistently advance MSMEs is through the People’s Business Credit (KUR) program channeled through financial institutions with a guarantee pattern. The cost of interest rates on credit / financing is subsidized by the government from the APBN. In 2021, the realization of KUR reached IDR 281.86 trillion. The realization of KUR distribution is reported to have mostly entered the micro KUR segment (63.71 percent), small KUR (32.71 percent), supermicro KUR (3.57 percent), and Indonesian labor KUR (0.01 percent). Supermicro KUR has a maximum credit ceiling of Rp 10 million per recipient. This type of KUR is prioritized for housewives and laid-off workers who run businesses. That way, when MSMEs have advanced, they should become aware and compliant taxpayers.
Daniel explained that there are three categories of MSME definition that will have implications for taxation aspects. First, micro business scale is a business with a net worth/asset (excluding land and building of the business place) of IDR 50 million per year maximum. Second, small-scale businesses are categorized as businesses with a maximum sales/omzet of IDR 300 million per year and a maximum net worth/assets (excluding land and buildings of the business premises) of more than IDR 50 million-Rp 500 million, and a maximum sales/omzet of more than IDR 300 million-Rp 2.5 billion. Third, medium-scale businesses are defined as businesses with a maximum net worth/assets (excluding land and buildings) of more than Rp 500 million-Rp 10 billion, and a maximum sales/omzet of more than Rp 2.5 billion-Rp 50 billion.
“In accordance with Government Regulation (PP) Number 23 Year 2018, MSMEs with gross turnover below IDR 4.8 billion a year can use the MSME Final Income Tax rate of 0.5 percent of gross income. This means that MSMEs with a gross turnover of more than IDR 4.8 billion a year must be confirmed as Taxable Entrepreneurs (PKP) and use the normal income tax rate. For example, if our turnover is IDR 100 million, then the final income tax paid to the state treasury is 0.5 percent of that turnover,” said Daniel.
Currently, the gross turnover limit that is not subject to the 0.5 percent MSME final income tax is a business with a turnover of up to 500 million. This means that this limit is not subject to income tax for gross circulation in 2022. This provision has been regulated in Law Number 7 of 2021 concerning Harmonization of Tax Regulations (HPP Law).
“SSE (Electronic Deposit Letter) for Billing code for MSMEs, namely 411128 – 420 and the latest deposit on the 15th of the following month, the latest report on the 20th of the following month. Perhaps MSMEs still (consider) tax as a burden, because MSMEs feel there is no benefit. Whereas (tax) has many benefits, for infrastructure, development. The bigger the tax, the bigger the benefit. Entrepreneurs must see taxes not as a burden but an obligation that will be enjoyed together,” Daniel explained.
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On the same occasion, Senior Manager Compliance Division of PT Pro Visioner Konsultindo Hariyanto assessed that MSMEs’ awareness of the importance of business digitalization is also accompanied by government policies that seek to support MSMEs. Starting from the provision of applications that help financial reporting. In terms of taxation, the final Income Tax (PPh) rate is also very small and the ease of tax payment is getting better.
“Now the government has provided easy tax payment facilities, starting from how MSMEs pay, reporting is already on-line, we no longer need to go to the tax office, simply by reporting the annual SPT (Tax Return) on-line. There are so many conveniences for taxpayers,” said Hariyanto.
Thus, it is hoped that digitalization will not only spark the development of MSMEs, but also increase tax awareness. Optimizing tax revenue will benefit the community, including MSMEs. Indeed, the sales/distribution of MSME goods/products/services will not run smoothly without adequate transportation and internet supporting infrastructure. In the 2021 State Budget, the infrastructure budget reaches IDR 402.8 trillion and IDR 11.1 trillion is given by the government for the provision of ICT infrastructure.
