Gov’t Reduces Final Income Tax for MSMEs

President Jokowi has a dialogue with a businesswoman at the launching of PPh Reduction for MSMEs in East Java Expo, Surabaya, on Friday (22/6). (Photo by: Oji/Public Relations).

President Joko “Jokowi” Widodo expressed his hope that the final income tax (PPh) reduction for Micro, Small and Medium Enterprises (MSMEs) from 1 percent to 0.5 percent will help them to scale up their business to the next level.

“The Government wants it that way,” President Jokowi said during his remarks at the launching of PPh Reduction for MSMEs in East Java Expo, Surabaya, on Friday (22/6).

Although the current global economic condition has not improved, according to the President, Indonesia’s economic growth is now at the top four among the G20 countries.

“We should be grateful, because many other countries are distraught, because global economic condition has not improved, has not back to normal,” the President said.

President Jokowi also reminded that MSMEs must adjust quickly with the fast paced changing world. “Do not depend on direct selling. Sell your products online, promote them through social media,” he said while adding that a good product must come with a good packaging and ear catching brand to attract customers.

In addition to payment method, the President also wants MSMEs to follow other countries to introduce cashless method, using a gadget or mobile phone so customers can make payments everywhere. “Other countries have done it. In some cities, we also starting to do that,” President Jokowi said.

In the meantime, President Jokowi said the Government has provided a subsidy for Smallholder Business Credit (KUR) loan with 7 percent interest and allocated more than Rp10 trillion for it.

“The process is easy, please make use of it. Micro KUR loan up to Rp25 million at BRI (a state-owned bank) and do not need collateral. The Government provides it,” the President said.

Also attending the occasion were First Lady Ibu Iriana, Coordinating Minister for the Economy Darmin Nasution, Cabinet Secretary Pramono Anung, Minister of Public Works and Public Housing Basuki Hadimuljono, Head of Creative Economy Agency (Bekraf) Triawan Munaf, Deputy Minister of Finance Mardiasmo, and Governor of East Java Soekarwo. (RAH/ES) (GWH/MMB/Naster)