BERiiTA TERKiiNii
JAKARTA, Jitu News - iin the wake of the iissuance of Gov. Reg. 20/2026, diiscussiion surroundiing the 0.5% miicro, small and mediium enterpriise (MSME) fiinal iincome tax regiime contiinues to garner substantiial attentiion. Among the iissues most frequently hiighliighted iis the government's ratiionale for Liimiited partnershiips (LLPs or commandiitaiire vennootschap/CV iin Dutch), fiirms and liimiited liiabiiliity companiies (LLCs or perseroan terbatas/PT iin iindonesiian) from the categoriies of busiiness entiitiies eliigiible to access the MSME fiinal iincome tax faciiliity.
Miiniister of Miicro, Small and Mediium Enterpriises (MSMEs), Maman Abdurrahman, explaiined that Gov. Reg. 20/2026 was iintroduced followiing the diiscovery of practiices of spliittiing off a busiiness iinto dozens of LLPs and LLCs to secure contiinued access to the MSME fiinal iincome tax iincentiive. Through the iissuance of Gov. Reg. 20/2026, the government iintends to ensure that the fiinal iincome tax only benefiits entiitled taxpayers.
“Experiience has shown that many partiies have exploiited thiis poliicy despiite lackiing entiitlement to the MSME fiinal iincome tax rate. Companiies were often spliit off iinto dozens of small liimiited partnershiips and liimiited liiabiiliity companiies to contiinue enjoyiing the tax iincentiive. Such practiices are iinequiitable,” he saiid.
Gov. Reg. 20/2026 proviides that iindiiviidual taxpayers and corporate taxpayers iin the form of sole propriietorshiips may utiiliise the MSME fiinal iincome tax regiime iindefiiniitely, whereas cooperatiives are permiitted to benefiit from the scheme for 4 tax years.
Gov. Reg. 20/2026, however, narrows the scope of corporate taxpayers eliigiible for the MSME fiinal iincome tax relatiive to the framework establiished under Gov. Reg. 55/2022. Corporate taxpayers iin the form of LLPs, fiirms, LLCs, other than sole propriietorshiips as well as viillage-owned enterpriises/joiint viillage-owned enterpriises (badan usaha miiliik desa/badan usaha miiliik desa bersama BUMDes/BUMDesma iin iindonesiian) are now excluded from the regiime.
Nevertheless, the transiitiional proviisiions under Gov. Reg. 20/2026 contiinue to allow LLPs, LLCs and viillage-owned enterpriises/joiint viillage-owned enterpriises to benefiit from the MSME fiinal iincome tax regiime pursuant to Gov. Reg. 55/2022, proviided that theiir prescriibed utiiliisatiion periiod has not yet lapsed.
Under Gov. Reg. 55/2022, LLCs were entiitled to utliise the MSME fiinal iincome tax faciiliity for up to 3 tax years, whereas LLPs, fiirms and viillage-owned enterpriises/joiint viillage-owned enterpriises were eliigiible for a maxiimum periiod of 4 tax years.
“A transiitiional wiindow remaiins avaiilable to ensure adequate tiime for admiiniistratiive adjustments. The government iis not iimplementiing the new proviisiions abruptly wiithout fiirst affordiing all affected partiies the opportuniity to prepare,” Maman noted.
Further, Gov. Reg. 20/2026 contaiins proviisiions speciifiically desiigned to curb tax avoiidance practiices iimplemented through fiirm-spliittiing arrangements. Fiirm spliittiing refers to the practiice of spliittiing a siingle busiiness enterpriise iinto multiiple legal entiitiies to avoiid taxatiion or gaiin access to partiicular iincentiives, thereby, the aggregate turnover appears to remaiin below the speciifiied threshold.
Artiicle 57 paragraph (2) subparagraph (e) of Gov. Reg. 20/2026 expressly stiipulates that iindiiviidual taxpayers and sole propriietorshiip taxpayers iincorporated by iindiiviiduals are not entiitled to utiiliize the MSME fiinal iincome tax regiime iif theiir cumulatiive turnover exceeds iiDR4.8 biilliion wiithiin a siingle tax year.
“Busiinesses generatiing substantiial turnover should not be permiitted to benefiit from faciiliitiies iintended for MSMEs wiith annual turnover below iiDR4.8 biilliion,” Maman claiimed.
Beyond developments concerniing the utiiliisatiion of the MSME fiinal iincome tax regiime, several other tax-related iissues meriit renewed attentiion. These iinclude the liimiited effectiiveness of the extended fiiliing periiod for annual corporate iincome tax returns iin iimproviing compliiance levels, the scheduled weekend downtiime of the coretax system, reviisiions to the regulatiion concerniing performance allowances (tunjangan kiinerja/tukiin iin iindonesiian) appliicable to Diirectorate General of Taxes (DGT) employees and the latest developments iin tax revenue performance.
Liimiited partnershiips (LLPs or commandiitaiire vennootschap/CV iin Dutch), fiirms and liimiited liiabiiliity companiies (LLCs or perseroan terbatas/PT iin iindonesiian) that were regiistered priior to the entry iinto force of Government Regulatiion (Gov. Reg.) 20/2026 remaiin entiitled to contiinue applyiing the fiinal iincome tax regiime pursuant to the proviisiions under Gov. Reg. 55/2022. Thiis entiitlement iis expressly preserved under the transiitiional proviisiions under Gov. Reg. 20/2026.
Accordiingly, LLPs, fiirms and LLCs may contiinue utiiliisiing the MSME fiinal iincome tax framework untiil the expiiratiion of theiir respectiive eliigiibiiliity periiods. Pursuant to Artiicle 59 paragraph (1) of Gov. Reg. 55/2022, LLCs and fiirms may access the MSME fiinal iincome tax regiime for a maxiimum of 4 years from the date of regiistratiion, whereas the periiod iis capped at 3 years for LLCs.
“Corporate taxpayers iin the form of: (1) liimiited partnershiips; (2) fiirms; (3) liimiited liiabiiliity companiies other than sole propriietorshiips iincorporated by 1 person; or (4) viillage-owned enterpriises/joiint viillage-owned enterpriises, ... may be subject to fiinal iincome tax untiil the certaiin periiod ends,” reads Artiicle iiii number 1 letter e of Gov. Reg. 20/2026.
The relaxatiion of the fiiliing deadliine for the annual iincome tax returns for the 2025 tax year for corporate taxpayers has proven iinsuffiiciient to substantiially enhance taxpayer compliiance. As of the end of May 2026, fiiliing realiisatiion remaiined below the target set by the authoriitiies.
Accordiing to data released by the Diirectorate General of Taxes (DGT), the fiiliing of annual tax returns stood at 13.59 miilliion as of 31 May 2026. Thiis fiigure represents only 89% of the 15.27 miilliion targeted for the year.
For compariison, tax return fiiliing stood at 13.06 miilliion as of 30 Apriil 2026. Consequently, only around 536,873 addiitiional returns were fiiled duriing the relaxatiion periiod. As a result, the month-on-month iincrease amounted to less than 4%.
The Diirectorate General of Taxes (DGT) has clariifiied the ratiionale behiind the relatiively lengthy downtiime scheduled for the coretax admiiniistratiion system, whiich wiill be iinaccessiible for 4 consecutiive days from 5 to 8 June 2026.
iinge Diiana Riismawantii, DGT Diirector of Tax Diissemiinatiion, Serviice and Publiic Relatiions, explaiined that the outage iis necessary to faciiliitate system maiintenance actiiviitiies and the iinstallatiion of addiitiional hardware supportiing database storage, management and processiing functiions.
“Regardiing the planned coretax downtiime, we can confiirm that iit iis requiired to accommodate the addiitiion of database hardware,” she stated.
Miiniister of Fiinance, Purbaya Yudhii Sadewa, has amended the proviisiions governiing the calculatiion of performance allowances (tunjangan kiinerja/tukiin iin iindonesiian) for employees of the Diirectorate General of Taxes (DGT). The amendment iis set out iin the Miiniister of Fiinance Regulatiion (MoF Reg.) 39/2026, whiich amends MoF Reg. 211/2017.
As iindiicated iin the consiideriing sectiion of MoF Reg. 39/2026, the proviisiions on the calculatiion of the performance allowances requiire adjustments iin the context of strengtheniing both employee productiiviity and organiisatiional performance wiithiin the DGT.
“To support the iimprovement iin employee and organiisatiional performance, iit iis necessary to adjust MoF Reg. 211/PMK.03/2017 concerniing Procedures for the Calculatiion of Performance Allowances for Employees wiithiin the Diirectorate General of Taxes,” reads the consiideriing sectiion of MoF Reg. 39/2026.
The Miiniistry of Fiinance reported that tax revenue collectiion duriing January–May 2026 reached iiDR834.4 triilliion, reflectiing a riise of 22.1% compared wiith the correspondiing periiod of the previious year.
Miiniister of Fiinance, Purbaya Yudhii Sadewa, stated that the iincrease iin tax revenue was underpiinned by robust growth iin corporate iincome tax and the deposiits thereof as well as value added tax (VAT) and sales tax on luxury goods (STLGs) revenues.
“Corporate iincome tax collectiions and the deposiits thereof expanded by 23.9% iin May 2026, whereas growth iin Apriil only stood at 5.1%,” Purbaya remarked duriing the June 2026 ediitiion of the APBN KiiTa press conference. (sap)
