Government Officially Makes 0.5% Final Income Tax for MSMEs Permanent

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Published by IT Adyasta at November 25, 2025

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Goverment officially makes 0.5% Final Income Tax for MSMEs

The government has officially established the Micro, Small, and Medium Enterprises (MSME) Final Income Tax (Final PPh) policy as a permanent regulation with no time limit. The policy, which was previously set to apply only until 2029, is now confirmed to be valid indefinitely.

The Minister of MSMEs, Maman Abdurrahman, explained that the government emphasizes two key provisions regarding the Final PPh rate for MSME taxpayers:

0% for MSMEs with annual revenue up to IDR 500 million.
0.5% for MSMEs with annual revenue up to IDR 4.8 billion.

“This policy is established as a permanent rule. For those with revenue below IDR 500 million, the rate is 0 percent, while for revenue up to IDR 4.8 billion, the rate is 0.5 percent. It applies without any time limit,” Maman said during a meeting at the Coordinating Ministry for Economic Affairs on Monday (November 17).

With this decision, MSME players across Indonesia are expected to gain legal certainty and greater ease in fulfilling their tax obligations, while also boosting the growth of small businesses that serve as the backbone of the national economy.

Photo by : tempo.co