Indonesia business group wants stronger MSME support with new marketplace tax

The Indonesian Employers Association (Apindo) is urging for stronger support for micro, small, and medium enterprises (MSMEs) as the government prepares to implement income tax collection through online marketplaces. Apindo believes this policy shift requires a parallel effort to boost the capacity and financial literacy of MSME players.

Ronald Walla, head of Apindo's MSME division, stated that while many MSMEs have seen their turnover increase, they often lack adequate financial management skills. This deficiency could lead to losses once operational costs and tax obligations are factored in. "For effectiveness, two things are needed. The policy can proceed, but the capacity building and financial management must also move forward," Ronald told reporters.

Apindo advocates for comprehensive assistance to MSMEs, extending beyond just financing. They highlight the critical need for market information and access to help businesses produce goods that meet consumer demand. The association also calls for government support in reinforcing the tax ecosystem for MSMEs, suggesting an increase in the number of tax consultants available to serve smaller businesses.

This initiative aims to improve tax compliance among MSMEs while simplifying the process for them to fulfill their legal obligations. Apindo sees this as crucial for the sustainable growth of the sector.

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For effectiveness, two things are needed. The policy can proceed, but the capacity building and financial management must also move forward.