Government Extends 0.5% MSME Tax Incentive Until 2029

Amid ongoing efforts to safeguard national economic resilience, the government once again shows its commitment to supporting the micro, small, and medium enterprises (MSMEs) sector. Through its latest fiscal policy, the final income tax (PPh) incentive at a reduced rate of 0.5% will be extended until 2029.

In a press conference held in Jakarta on Monday (September 15, 2025), the Coordinating Minister for Economic Affairs, Airlangga Hartarto, emphasized that this policy aims to maintain MSME competitiveness while allowing business players more room to grow.

The facility is expected to directly benefit 542,000 registered MSME taxpayers with an annual gross turnover of up to IDR 4.8 billion. With this extension, MSMEs can continue to enjoy a lighter tax burden, enabling them to allocate more working capital for business development.

Airlangga also stressed that MSMEs are the backbone of Indonesia’s economy. Fiscal support like this is expected to strengthen MSMEs’ contribution to the national Gross Domestic Product (GDP) while creating broader employment opportunities.

This policy is not only a sign of the government’s commitment to MSMEs but also a long-term strategy to drive inclusive and sustainable economic transformation.

Has your business already made use of the 0.5% final income tax incentive? Don’t miss the chance to optimize your tax management and maximize your business potential. Consult now to ensure you reap the full benefits for your enterprise.

The extension of the 0.5% final income tax incentive until 2029 is solid proof that the government is committed to sustaining and growing MSMEs in Indonesia. With policies that favor small businesses, the national business ecosystem is expected to become stronger, more adaptive, and more competitive in the global market.

Satra Sinar Abadi Group