President vows to cut tax on MSMEs to 0.25 percent

Jakarta (ANTARA News) - President Joko Widodo (Jokowi) has vowed to slash the tax on micro small and medium enterprises (MSMEs) from 1 percent to 0.25 percent.

The president wished to cut the tax in response to a request from MSMEs, which considered the tax burdensome, Minister for Cooperatives and Small and Medium Businesses Puspayoga said, after accompanying 31 SMEs during a meeting with the president at the Merdeka Palace, here on Friday.

"The president has agreed to the request. Hopefully, the regulation to that effect could be revised next week so that the tax will no longer stand at 1 percent," he said.

In addition, he will also lower the tariff of redemption money from SMEs taking part in the tax amnesty program, he stressed.

The tariff of redemption money for SMEs declaring their wealth of up to Rp10 billion will remain subject to a redemption tariff of 0.5 percent, he added.

He pointed out that the government is also considering lowering the 2 percent redemption tariff for SMEs declaring wealth of above Rp10 billion.

"The tariff for corporate taxpayer currently reaches 0.5 percent. But the tariff for personal taxpayer must not be 2 percent. It is burdensome. We propose it at 0.5 percent. The president has responded to it and has informed it to the director general of taxation," he remarked.(*)