Finance Minister Extends UMKM Final Tax Scheme to 2029

JAKARTA – Finance Minister Purbaya Yudhi Sadewa said at a Financial System Stability Committee (KSSK) press conference on Monday, 3 November 2025, that the 0.5 % final tax scheme for micro, small and medium enterprises (UMKM) will be extended to fiscal year 2029. The extension allows UMKM to continue applying the final income tax rate for the specified period.

He explained that the extension will be accompanied by an adjustment of eligible taxpayers, which will be incorporated into the amendment of Government Regulation No. 55/2022. While the Coordinating Ministry for Economic Affairs previously indicated the scheme would be unlimited for individual and sole‑proprietor taxpayers, the current focus shifts to cooperatives and certain business entities.

The extension gives UMKM cooperatives an additional four‑year window to benefit from the 0.5 % final rate, potentially reducing tax burdens and improving cash flow. The revised regulation is expected to be finalized soon, prompting taxpayers to align their filings with the new rules.