Final Income Tax Tariff for MSMEs Cuts Down to 0,5%

On 22 June 2018, The President of Republic of Indonesia Mr. Joko Widodo symbolically launched Government Regulation Number 23 Year 2018 regarding Income Tax on Operating Income Received or Acquired by Taxpayers Having Certain Gross Turnover (‘GR 23’). GR 23 is a revision of the previous Government Regulation Number 46 Year 2013 (‘GR 46’). The launch of GR 23 was held in Surabaya at Jatim Expo (Kompas, 2018). Although this regulation has been implemented since its issuance on 8 June 2018, the launch held in Surabaya aims to socialize GR 23 to the public society.

Moreover, GR 23 was being issued in taking into account the consideration to encourage the society to participate in formal economic activities. The Government believes that the enactment of GR 23 will provide facilities and more fairness to Taxpayers, especially those categorized on Micro, Small and Medium Enterprises (MSMEs).

Indonesian Chambers and Industry (KADIN) positively respond to the new legislation. KADIN’s chairman Rosan Perkasa Roeslani assumes that GR 23 will impose positive influence to MSMEs boosting its business to grow. (Kompas, 2018)

On previous GR 46 the Government regulated MSMEs Taxpayer (having acquired certain gross turnover of not more than Rp4,800,000,000.00 in 1 year) is subject to final Income Tax at the rate of 1%.  Pursuant to GR 23, the Government reduced its rate to 0.5%.

Below is the summary of GR 46 and GR 23 in comparison:

No.Key PointGR 46GR 23


In the event should the Taxpayer whose categorized to having certain gross turnover based on GR 23 wishes to apply the general tariff, he/she must submit the application of permission to Director General of Taxation.

Further, based on type of Taxpayers, the imposition of 0,5% Final Income Tax has maximum period of time as intended below:

  1. Individual Taxpayer may apply the tariff for 7 fiscal years.
  2. Corporate Taxpayers in the form of cooperatives, limited partnership, or firms may apply the tariff for 4 fiscal years.
  3. Corporate Taxpayers in the form of limited liability companies may apply the tariff for 3 fiscal years.


Contrarily, the Government also listed the Taxpayer who are not entitled to apply the 0,5% tariff such as:

  1. Taxpayer who chooses to apply Income Tax calculation according to general provision.
  2. Individual Taxpayers who received or earned its gross turnover from services in relation to independent work.
  3. Taxpayer whose tax payable on its income received or earned overseas has already paid overseas.
  4. Taxpayer whose income already subject to Final Income Tax based on separate taxlaws and regulations.
  5. Taxpayer whose income is excluded as tax objects.
  6. Taxpayer categorized as permanent establishment.


In conclusion, although the impact on the growth rate of MSMEs cannot yet be seen, GR 23 facilitates MSMEs in calculating income tax and eases the tax burden. In addition to reduced Final Income Tax rate of 0.5%, GR 23 also provides taxpayers with freedom to choose its income tax calculation.



  1. Peraturan Pemerintah Nomor 23 tahun 2018 tentang Pajak Penghasilan atas Penghasilan dari Usaha yang Diterima atau Diperoleh Wajib Pajak yang Memiliki Peredaran Bruto Tertentu.
  2. Peraturan Pemerintah nomor 46 Tahun 2013 tentang Pajak Penghasilan atas Penghasilan dari Usaha yang Diterima atau Diperoleh Wajib Pajak yang Memiliki Peredaran Bruto Tertentu.
  3. Andri Donnal Putera, Kompas, 2018,
  4. Andri Donnal Putera, Kompas, 2018,


The information contained on this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations there may be delays, omissions or inaccuracies in information contained on this article. Accordingly, the information on this article is provided with the understanding that the author(s) and publisher(s) are not herein engaged in rendering professional advice or services. As such, it should not be used as a substitute for consultation with a competent adviser. Before making any decision or taking any action, the reader should always consult a professional adviser relating to the relevant article posting. Foresight Consulting as one of the best tax consultant in Jakarta region Indonesia will be happy to help find best solution to your tax issues.


Writer : Andy Bagus.

Editor : Handy/Huswatun/Ressa/Gilang.





The Minister of Finance Regulation Number 226/PMK.03/2013
The Minister of Finance Regulation Number 226/PMK.03/2013

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