The latest tax policy shift in Indonesia has begun after the government confirmed there will be no extension for the use of the 0.5 percent Final Income Tax for corporate taxpayers. This decision has prompted many business owners to question the new policy direction, especially those who have relied on the scheme to manage their tax efficiency. On one hand, the government aims to strengthen transparency. On the other, businesses now need to adjust their bookkeeping systems more seriously in order to meet tax obligations under normal regulations.
Director General of Taxes, Bimo Wijayanto, conveyed this in the APBN KiTa press conference. His explanation signals that the simplified SME tax scheme will soon see major changes, in line with the harmonization of the revised draft of Government Regulation 55 of 2022, which is still awaiting the President’s approval.
New Policy and Its Impact on Businesses Related to Final Income Tax
The government emphasized that incorporated companies can no longer extend the use of the 0.5 percent Final Income Tax. This policy applies to entities such as CV, PT, and firms, except for those already within an approved usage period. Bimo stressed that business owners must begin shifting to full bookkeeping systems to calculate their tax liabilities under the applicable general rates.
He stated, “Corporate taxpayers can no longer use the 0.5% Final Income Tax. They must start implementing bookkeeping to calculate payable income tax using normal rates.”
This clarification shows that the government wants companies to calculate taxes based on actual financial reports, rather than simplified incentive schemes as before.
Transition Period and New Provisions for the 0.5 Percent Final Income Tax
Bimo explained that companies still benefiting from the incentive may continue until their period ends. However, once finished, access will be halted. “This means they may continue using it for the four-year period, but only those already running. There will be no new applications allowed for corporate taxpayers to use the 0.5% Final Income Tax incentive,” he said.
The government found many taxpayers continued using the scheme even after surpassing the annual income threshold of Rp 4.8 billion. This discovery has made regulation tightening necessary to prevent companies from avoiding taxes through a scheme originally designed for small-scale MSMEs.
Supervision and Tax Compliance in the Final Income Tax Policy
The Directorate General of Taxes noted a phenomenon known as firm splitting, where companies are divided so each unit’s turnover remains under the MSME ceiling. This practice has led to revenue bunching, not driven by natural growth, but intentionally maintained to retain access to the 0.5 percent Final Income Tax rate.
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According to the government, the removal of this facility was necessary to ensure fairness and support healthier fiscal contributions. Corporate taxpayers will soon be required to have proper bookkeeping so that income reporting and tax obligations become transparent. Bimo explained that companies must apply the standard tax rates in line with the current regulation, instead of relying on the previous incentive.
Restoring Compliance and the Importance of Professional Assistance
The shift toward full bookkeeping obligations is far from simple, especially for businesses accustomed to simplified schemes. The challenge is not only administrative, but also internal, requiring stronger financial management so that reports can serve as accurate tax calculation references.
In moments like this, professional support becomes essential. Companies need to ensure their tax management is accurate, compliant, and free of future risk.
Bizindo can assist business owners throughout this transition. From establishing corporate bookkeeping systems, tax consulting, audit assistance, and financial reporting, to business legality services. If you’re preparing to transition from the 0.5 percent Final Income Tax scheme to the full taxation system, Bizindo is ready to guide your company in staying compliant and protected at every step. Contact us today at www.bizindo.com
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