MSME business actors with a turnover of under IDR 500 million a year are not subject to Final Income Tax of 0.5% of gross turnover. This is regulated in Government Regulation (PP) Number 55 of 2022 concerning Adjustments to Regulations in the Income Tax (PPh) Sector, as a derivative regulation of the HPP Law No. 7 of 2021.
Thus, for MSMEs with gross income that does not exceed IDR 500 million in a year, they are not subject to PPh. Meanwhile, MSMEs whose turnover exceeds IDR 500 million to IDR 4.8 billion per year are required to pay final PPh of 0.5 percent. In this regulation, it can be assumed that the government will no longer target taxes on micro businesses, but on small and medium businesses.
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