Jakarta (ANTARA News) - The government will immediately reduce the annual income tax rate for small and medium enterprises (SMEs) from one percent to 0.5 percent.
"The step aims to boost the growth of SMEs. The regulation is under discussion," Puspita W. Surono, Finance Ministry`s expert staff for tax supervision, noted in a press statement received here on Friday.
Under Government Regulation No. 46 of 2013, SMEs, with an annual turnover threshold of Rp4.8 billion, were required to pay an income tax of one percent.
The government will immediately revise the related regulations.
"This is the government`s commitment to developing SMEs. The tax should support SMEs through a light tariff," Surono stated.
The Indonesian government is mulling over lowering the amount of tax on SMEs to 0.5 percent, from one percent, as of late March 2018, President Joko Widodo earlier stated.
"I have, in fact, proposed 0.25 percent, but the finance minister rejected it. If the decline is that far, it will have an impact on the state revenues," President Joko Widodo had noted while addressing the opening of a meeting of the plenary council II and meeting of the Indonesian Young Businessmen Association leadership of 2018 in Tangerang, west of Jakarta, on Wednesday (Mar 7).
The president believes that spatial changes in the global economy had created opportunities for further boosting the nation`s economic conditions.
He has forecast that several food and beverage manufacturers as well as lifestyle industries will have brighter prospects in the global market.
"I think that such businesses will grow well in future. I have seen for myself food stalls and restaurants in several countries, which I think will grow at a faster pace," he pointed out.
He also opined that digital application-based start-ups, particularly those engaged in sociopreneurship, will also grow rapidly.
Indonesia also has several industries operating in the handicraft sector that are known for their creativity, he added.