Also on 14 August 2026, the Director General of Taxes formally declared that revenue generated by UMKMs up to IDR500 million per fiscal year shall not be subject to Personal Income Tax (PPh). This clarification stems from the latest amendment to the Income Tax Act, reinforcing the tax‑exempt threshold for micro‑enterprises. The announcement underscores the government’s commitment to reducing the fiscal burden on small businesses while maintaining robust revenue collection from larger entities. It also aligns with recent OECD‑endorsed guidance on simplifying tax compliance for micro‑enterprises.
Key Takeaways
- UMKMs with annual revenue ≤ IDR500 million are exempt from PPh obligations.
- Enterprises must still retain accurate financial records to substantiate exemption claims.
- The exemption applies retroactively to the beginning of the current fiscal year.
Disclaimer:This article is compiled and summarized based on publicly available information and is for general information and academic exchange purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. For tax planning, please consult a qualified professional tax advisor or legal counsel.
Source: Read Original Announcement