Airlangga Confirms Extension of Half Percent Tax for UMKMs

Economy Coordinator Airlangga Hartarto attended a limited meeting chaired by President Prabowo Subianto at the Presidential Palace in Jakarta on 29 October 2025. He announced that the government is prepared to extend the final income tax rate of zero point five percent for micro, small, and medium enterprises (UMKMs).

The rate was originally set by Government Regulation No. 55 of 2022, granting a seven‑year period for individual UMKMs, four years for limited partnerships (CV), and three years for limited liability companies (PT), expiring at the start of 2025. The government decided to prolong it until 2029, and Tax Directorate General head Bimo Wijayanto said the amendment draft is in the finalization stage after the presidential initiative was approved on 25 August 2025.

The extension preserves tax relief for UMKMs with annual turnover below IDR 4.8 billion, supports the national priority program to boost small‑business growth, and is expected to strengthen UMKM contributions to the economy in 2026 and beyond.