The Presumptive Tax Regime on Micro, Small and Medium Enterprises in Indonesia

Abstract

In July 2013, Indonesia implemented the presumptive tax regime on micro, small and medium enterprises (MSMEs) by assigning Government Regulation No.46/2013. This regulation simplified the tax administration and provides tax cuts to MSMEs to help them grow and encourage voluntary tax compliance, which eventually will increase their contribution to state revenue. This study provides an analysis of the implementation of this new tax regime by comparing related literature on practices of this tax regime in many countries with the recent conditions in Indonesia after this regulation was applied. It seems that the new tax regime encourages voluntary tax compliance and stimulates the contribution of MSMEs to state revenue. However, some challenges, such as different definitions, lack of tax knowledge, impartiality to business losses, and the indication of tax avoidance must be overcome by the government by improving policies that favor MSMEs.
 Keywords: Indonesia, MSMEs, presumptive tax, threshold

Analysis of Tax Burden and Its Relevance to Government Regulation Number 23 Year 2018 for Micro, Small, and Medium Enterprises (Msme)

“…The issuance of PP-46/2013 has certainly changed the way in which Income tax is imposed on MSMEs. In line with that, the results of Aditya (2020) proves that PP-46/2013 is able to increase taxpayer compliance which then increases the contribution of MSMEs to state revenue. This happens because the calculation of income tax based on turnover is easier for MSMEs to carry out.…”

“…PP-46/2013 and PP-23/2018 are presumptive tax implementations in Indonesia that use the tax base in the form of gross turnover. Aditya (2020) proves that PP-46/2013 is able to increase taxpayer compliance which then increases the contribution of MSMEs to state revenues. This happens because the calculation of Income tax based on gross turnover is easier for MSMEs to carry out.…”

“…Several countries have used presumptive taxes to tax the MSME sector, such as Uganda (Verberne, 2018), Rwanda (Eissa & Zeitlin, 2017), and Indonesia (Aditya, 2020). Presumptive tax is an imposition scheme that uses an alternative tax base that is different from the imposition of the general tax regime.…”

Lack of Efficiency in classifying Concussion of Corona Crisis over Small Businesses using Novel Support Vector Machine Algorithm Comparing K-Mode Algorithm

“…It is essential for the general public to know the sector wise percentage of sectors in small businesses before and after the pandemic (Byrne 2021; Oliva, Hassan, and Mohamed 2021) in India. With this research in today's world, people can know about the sectors (Aditya 2020) that are affected by this pandemic in small businesses, so if this problem occurs in the future, we can take some resolutions to solve it (Fairlie 2020). The application of this approach is to know about profit and loss that are affected in different sectors before the pandemic and after the pandemic (Oliva, Hassan, and Mohamed 2021).…”

The Effect of Tax Knowledge on Voluntary Tax Compliance with Trust as a Mediating Variable: A Study on Micro, Small, and Medium Enterprises (MSMEs)

“…The rate charged is 1%. These rules facilitate the administration of reporting and improve voluntary tax compliance (Aditya, 2020).…”