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NEWS UPDATES Asean Affairs   8 November 2013  

Indonesian SME's need Incentives crucial to make them pay taxes
The government needs to provide small and medium enterprises (SMEs) with business facilities and incentives in return for their tax contributions, says the Indonesian Chamber of Commerce and Industry (Kadin).

Kadin deputy chairman for SMEs Erwin Aksa said most small- and medium-scale businesspeople had often faced difficulties in attaining banks loans for expansions.

Aksa said rewards from the government in the form of soft loans might lure other businesspeople to comply with the government’s tax policy.

“If the government wants to encourage these businesspeople to pay taxes, the regulation has to benefit them too,” Aksa said after a talk on the SME tax payment system.

According to Aksa, the government could also provide a policy package that included training and cost assistance.

The Finance Ministry’s taxation office issued government regulation No. 46/2013 in July this year,
which aims to collect more taxes from SMEs.

The regulation fixes the income tax on individual and institutional taxpayers with annual business turnovers of up to Rp 4.8 billion (US$480,000) at 1 percent flat.

Finance Ministry Tax director general Fuad Rahmany said the regulation would take effect in January next year.

“We are still disseminating information [about this regulation] to the SMEs so that these businessmen won’t be surprised when it is finally implemented,” he said.

Fuad added that the government issued the regulation on SME tax to maximize the state’s potential income from taxes, especially from SMEs. He said that the state’s income from SME taxes had only reached 2 to 3 percent thus far.

“It means that only 10,000 of our estimated millions of small- and mid-scale businesspeople have paid taxes,” he said.

Fuad said that many of the small- and medium-scale businesspeople had claimed that they did not pay taxes due to several reasons, including because they lacked information as well as due to time constraints. He added that only few SMEs knew how to perform monthly financial accounting.

“Regulation No. 46/2013 aims to simplify the tax system payment for these SMEs,” he said. “The important thing is to pay first.”

The government, he added, had cooperated with lenders, such as Bank Negara Indonesia (BNI), Bank Mandiri, Bank Rakyat Indonesia (BRI) and Bank Central Asia (BCA) to provide tax payment methods via automated teller machines (ATM). For businesspeople in the regions who do not have any bank accounts, they could pay taxes via PT Pos Indonesia, he said.

“In the future, we will develop an IT system as well as mobile banking services,” he said.

Tax expert Gunadi from the University of Indonesia said that the regulation was a simple tax system with a self-assessment payment method that relied mostly on voluntary compliance from the SMEs.

“The government needs to have a specific supervising mechanism through which it can enforce the law on SME tax,” he said. (tam)

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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