Jakarta. The government denied Thursday media reports that they were planning to cut the threshold for the final income tax for Indonesia's micro, small and medium enterprises (MSMEs).

The government recently announced that it would extend the 0.5 percent final income tax incentive until 2025. This incentive was supposed to end in 2024. Local news agencies, however, reported that the government was considering lowering the threshold for MSMEs that would be eligible for the 0.5 percent final income tax despite the extension. Reports claimed that the government would lower the cap from Rp 4.8 billion ($293,898) to Rp 3.6 billion. In other words, only MSMEs that earn no more than Rp 3.6 billion in turnover could get that 0.5-percent final income tax rate.

"There are no plans to bring down the threshold. The government is currently focusing on providing a wide range of stimuli, including those dedicated to the MSMEs. So we are currently working on the changes on the existing regulations in relation to that," Febrio Kacaribu, a senior official at the Finance Ministry, was quoted as saying in a press statement.

Susiwijono, the secretary at the Coordinating Ministry for Economic Affairs, also made a similar statement.

"The government is really focused on providing all sorts of economic stimulus packages, particularly for our MSMEs. We will also follow up on these packages by revising the existing government or ministerial regulations. ... The recently announced package is only focused on extending the 0.5-percent final income tax incentive. There are no other changes," he said.

The government also exempts MSMEs whose turnover is less than Rp 500 million a year from having to pay income tax.

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