VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

Micro, Small and Medium Enterprises (MSMEs) are considered to have the most significant role in helping the Indonesian economy. This is evidenced by the contribution in gross domestic product and also the absorption of more dominant labor.

This was conveyed by the First Expert Tax Extension Functional at the Directorate General of Taxes, Angga Sukma Dhaniswara, in a dialogue with RRI, Tuesday (30/8/2022).

"Most MSMEs are engaged in the labor-intensive sector, and other roles that help Indonesia remain strong. Even though our country has been hit by a pandemic in recent years," said Angga.

Angga also said that MSMEs were the most stable sector. However, during the pandemic, MSMEs face extraordinary challenges.

"Because during the pandemic there was a change in the consumption pattern of people's goods and services, which are usually offline to online. So for MSMEs who are not used to selling online, they will be selected by nature," he said.

Seeing this phenomenon, Angga said that the Government could do many things to help MSMEs enter the digital world. One of them is by providing incentives to simplifying tax calculations.

"It can be done by assisting offline to digital business transitions through the BDS (Business Development Services) program, which collaborates with other institutions or other businesses," he said.

In Law No. 20 of 2008 concerning Micro, Small and Medium Enterprises, MSMEs have general criteria or classifications. The general classification is distinguished from net worth and turnover, including:

- For micro-enterprises, for example, he has a max wealth of 50 million or a max turnover of 300 million/year,

- For small businesses: wealth 50-500 million or turnover 300 million-2.5 billion/year

- Medium Enterprises: > 500 million – IDR 10 billion in assets, or turnover > IDR 2.5 billion – IDR 50 billion

"But for tax purposes, we only recognize two limits, namely MSMEs and non-SMEs. The limit lies in the amount of turnover in the previous tax year, which was in excess of 4.8 billion a year or not," he said.

Based on data from the Ministry of Cooperatives and SMEs, in 2019 the number of MSMEs reached 64.19 million. With a contribution to GDP of 61.97 percent or Rp8,573.89 trillion.

Meanwhile, the contribution of MSMEs to the Indonesian economy includes the ability to absorb 97 percent. This amount is from the total existing workforce and can collect up to 60.4 percent of the total investment.

However, the Covid-19 pandemic that hit Indonesia has reduced the number of MSMEs. Especially for MSMEs that have not been able to transform into a digital ecosystem. (RRI)