LPNU East Java proposes tax administration simplification for MSMEs

The Lembaga Perekonomian Nahdlatul Ulama (LPNU) of East Java has proposed the simplification of tax administration for micro, small, and medium enterprises (MSMEs). During a focus group discussion with the Ministry of MSMEs, Bappenas, and the Ministry of Finance, the organization advocated for using turnover as the primary basis for calculating, paying, and reporting taxes.

LPNU advisor R Djoni Sudjatmoko stated that while the organization supports the government's need for tax revenue, the system must align with the diverse administrative capacities of MSMEs. The proposal suggests separating administrative ease from tax rate incentives based on business scale. For micro and small businesses, LPNU recommends turnover-based reporting and preferential tax rates to encourage formalization and growth. For medium-sized businesses with annual turnovers between Rp 15 billion and Rp 50 billion, the proposal suggests maintaining simple turnover-based administration without preferential rates, utilizing national effective tax load benchmarks instead.