"Looking ahead, small and medium entrepreneurs must be given a chance to develop their businesses first. Afterwards, they are subject to taxes. So if possible the tax discount must be 80 percent instead of 50 percent," he said at the weekend.
He said the Finance Ministry was still discussing the amount of value added tax for small and medium entrepreneurs and he would propose a 80 percent tax discount for small and medium enterprises.
The Finance Ministry had earlier said small businesses that are exempted from value added tax are those having a business turnover of less than Rp600 million in 1 month.
As such, businessmen who have a turnover of Rp600 million to Rp4.8 billion per year are subject to taxes under Law No. 36/2008.
"The tax imposed on them is given 50 percent discount. For instance, if they make profit of Rp100 million, they must pay 25 percent of the profit or Rp25 million. After being deducted from 50 percent discount they have to pay Rp12.5 million. But we will propose the discount be raised to 80 percent," he said.
This was part of the efforts to provide incentives to small and medium businesses, he said adding the matter would be discussed with the Finance Ministry.
"We still have to discuss it again with the Finance Ministry," he said.(*)
Editor: Aditia Maruli Radja
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