SME Tax: ULM Economics Lecturer Highlights Challenges and Solutions for the Government
Banjarmasin – The government’s policy of imposing taxes on Small and Medium Enterprises (SMEs) by lowering the Final Income Tax (PPh) rate to 0.5 percent is seen as a strategic step to expand the tax base. However, its success greatly depends on the approach taken by the government.
According to Ir. Syahrial Shaddiq, M.Eng., MM., a lecturer at the Faculty of Economics and Business at Universitas Lambung Mangkurat (ULM), this policy can encourage the formalization and sustainability of SME businesses if implemented fairly and proportionally.
“If the tax is low and income-based, this policy can benefit SMEs. However, if implemented suddenly or burdensomely, it could pressure small business operators,” he said.
He emphasized that the success of this policy depends on a simple, transparent system, accompanied by incentives for SMEs to comply with taxes. Thus, SMEs can gain access to various government facilities such as funding, training, and legal protection.
“Conversely, if the conditions of SMEs, such as limited capital and low tax literacy, are not considered, it could have negative impacts and threaten business continuity,” he added.
Regarding the resilience of SMEs in facing various challenges, Syahrial explained that operational flexibility, linkage to local needs, and relatively low cost structures are the main factors of their durability.
“Lighter tax treatment indeed helps, but factors such as product innovation and operational efficiency also determine the sustainability of SMEs,” he explained.
Can this tax policy cause many SMEs to go out of business? According to Syahrial, it greatly depends on the design of the tax policy. If the tax rates and reporting mechanisms are too complicated or high, small SMEs with thin profit margins might struggle to survive.
“Conversely, if there are incentives such as tax exemptions for certain incomes or low progressive tax rates, the negative impacts can be minimized,” he said.
To ensure this policy runs effectively without burdening SMEs, Syahrial emphasized several steps the government needs to take. These include educating SME operators about the benefits and mechanisms of taxation, implementing low tax rates for small businesses, and providing incentives such as tax exemptions in the first year.
Additionally, simplifying the tax reporting mechanism through digital technology can also help SMEs more easily fulfill their tax obligations.
“Local governments also need to play an active role in supporting SMEs through training programs, partnerships, and market access to keep them competitive. With a comprehensive approach, tax policies can become a driver of SME growth, not a threat to their sustainability,” concluded Syahrial.
