Thursday 11 July 2013

APPLICATION OF TAXES WILL NOT TURN OFF SMALL INDUSTRIES



The Ministry of Industry admitted that the application of 1% taxes would increase the burden of Small and Medium Industry [SMI] after the fuel price hike. However, this sector is predicted to be able to face the economic conditions after the fuel price hike. In fact, SME will quickly adjust is production. ‘We are optimistic that the application of taxes for SME will be not be too businessmen”, said Euis Saedah, Director General of Small and Medium Industry at the Ministry of Industry in Jakarta on Wednesday (July 3, 2013).
               
Euis believed that the SME are flexible enough to survive and keep growing. One thing that makes them keep the spirit up, she said, is innovation and creativity. Because, with this, they can survive under any blows. The government has issued government regulation No. 46/2013 on Income Tax on Income Derived from Business or Received or Obtained by Taxpayer Who Has a Certain Gross Turnover. Based on the regulation, SME who are subject to 1% income tax are individual or corporate taxpayers who receive income not exceeding Rp4.8 billion a year. The tax will be applied starting July 1, 2013.
               
According to Euis, although there is a psychological affect due the tax increase, SME sector will quickly adjust. The tax will make small businesses more organized. With the payment to taxes, she saw that SME will also get used to manage their businesses properly. Euis said that there have been no complaints from SME. The Ministry of Industry is observing how the rule goes.
               
She re-emphasized that SME will be able to rise even though the government collects taxes from businesses with turnover of less than Rp4.8 billion a year. They also have to face serve challenges due to the fuel price hike, but they will be able to rise again. According to her, SME will quickly arrange them selves to be able to produce again, in the tax levy will also bring a sense of pride in contributing to the nation.
               
However, Euis requested that there should be a separation between tax levy on SME an SMI. The reason is that they have a difference in conducting business. For the small and medium industries (SMI), they should do the processing. While, for small and medium businesses (SME), most are just doing trade without doing the production process. In addition, she requested that the application of taxes should not be generalized.
               
According to her, SME have different strata. Each sector has different characteristic, so the treatment should also be different. She said that the decision and calculation of taxes is determined by the Ministry of Finance. He party is asked only to provide input. However, until now, she has not received a copy of the regulation on the application of taxes.
               
The Director General of Taxation of the Ministry of Finance, Fuad Rahmany, believed that the application of 1% tax of turnover was relatively small. According to him, there are many SME who turnover is Rp10 billion per month. SME should be taxed 25% of the profit, but, he said, that the Directorate General of Taxation only collects 1%. He said because he target is not those at the roadside, but in Tanah Abang or Mangga Dua. He admitted that there are a lot of businesses who are operating under the name of SME and not paying taxes. In fact, if examined further, he said, the turnover could reach Rp10 billion per month. (E)




Business News - July 05,2013    

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