Micro Business

Government Support (BKPM) for MSMEs to Continue to Grow

The Investment Coordinating Board (BKPM) continues to strive to increase the realization of investment in Indonesia. Not only that, BKPM together with other ministries and government institutions always work hard to restore the country’s economy which has been hit by the ongoing COVID-19 pandemic.

BKPM also took strategic steps in developing the MSME sector in Indonesia. With the increasing interest of the Indonesian people to start new businesses, coupled with government support (BKPM) for MSMEs, it is not surprising that in the end MSMEs became one of the main milestones in Indonesia’s economic recovery. Let’s look at the variety of government support (BKPM) for MSMEs that entrepreneurs can already feel.

Applying for a business license can be done

For anyone who wants to run a new business or extend a business license, it can now be done online through the Online Single Submission (OSS). This online platform is one of the government’s support (BKPM) for MSMEs in order to make it easier for entrepreneurs to start a business. That way, the growth and development of the MSME sector will be even more fertile, as will the country’s economic conditions.

The OSS, which has been in effect since 2018, has been integrated with other non-ministerial government ministries/agencies, including the Directorate General of Taxes, General Legal Administration, Population Administration, and many more. The existence of this OSS is a new breakthrough that can facilitate business actors to manage business requirements, business permits, and business operational permits in a practical, safe, and real time manner .

Import duty exemption

As a form of government support (BKPM) for MSMEs, the Ministry of Finance has delegated a number of authorities to BKPM regarding the management of incentives for entrepreneurs, one of which is the exemption of import duties used for the production of goods. The provision of these incentives is regulated in the Minister of Finance Regulation (PMK) No. 110.PMK.011/2005.

Broadly speaking, BKPM will take care of every application for import duty exemption that can be filed through OSS. Imported goods that enter the requirements for exemption from import duty must be goods shipped from abroad, goods that have gone through the Bonded Logistics Center (PLB), or goods that have come out of bonded zones or warehouses, special economic zones or free zones, and also companies that have received KITE facilities.

This import duty exemption policy also includes government support (BKPM) for MSMEs in the midst of a pandemic, especially with the increasingly rampant business of providing medical equipment, most of which are produced from abroad. For the import of medical goods, VAT and PPnBM will not be imposed. What’s more, the Ministry of Finance and BKPM have also imposed a PPh exemption on imports of goods related to efforts to handle the COVID-19 pandemic.

Application of tax incentives

Moving on to other types of tax incentives which are government support (BKPM) for MSMEs, BKPM is now also given the authority to provide fiscal incentives such as tax allowances and tax holidays . This is also regulated in the PMK, where the tax holiday limit is lowered from Rp. 1 trillion to Rp. 500 billion. The procedure for applying for tax holidays and tax allowances is even more concise and easy, which can be done through OSS.

BKPM also ensures that the evaluation of tax incentive applications in the form of tax holidays and tax allowances can be carried out in a maximum of 5 working days. Then, for companies that have not met the investment limit of IDR 500 billion, they can apply for a tax allowance that can provide a tax discount of up to 30%. It is hoped that the tax incentives provided can further strengthen government support (BKPM) for MSMEs, especially in the midst of a pandemic.

Encouraging investment in MSMEs

In line with the provision of tax incentives which are expected to be able to promote investment growth in Indonesia, another form of government support (BKPM) for MSMEs is to encourage large investors to cooperate with MSMEs. This does not only apply to foreign companies but also to national companies with fantastic investment figures.

The head of the BKPM, Bahli Lahadalia, revealed that now foreign investors are not allowed to become MSME shareholders, but foreign investors entering Indonesia are required to partner with local MSMEs. The aim is to further grow the MSME sector which is considered to be a major contributor to the Indonesian economy, as well as to expand employment opportunities in the region.

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