Certificate of PP 55 of 2022: Tax Ease Passport for MSMEs and Withholding Mechanisms

In the Indonesian tax landscape, support for Micro, Small, and Medium Enterprises (MSMEs) continues to be strengthened through regulations that simplify administrative obligations and lighten the tax burden. One vital instrument in this ecosystem is the Certificate (Surat Keterangan/Suket) based on Government Regulation (PP) Number 55 of 2022. This document is a legitimation tool for Taxpayers to enjoy the 0.5% Final Income Tax rate when transacting with other parties.

This article will thoroughly explore the function of the Certificate, how to obtain it, its validity, and relevant tax withholding case illustrations based on Minister of Finance Regulation (PMK) Number 164 of 2023.

1. Certificate of PP 55 of 2022: Definition and Urgency

A. What is the Certificate (Suket)?

The Certificate is an official document issued by the Tax Service Office (KPP) stating that the Taxpayer meets the criteria for the 0.5% Final Income Tax. Simply put, it is a special tax "identity card" for MSMEs with gross turnover under IDR 4.8 billion a year.

B. Strategic Function for Business Transactions

Without a Suket, counterparties are required to withhold tax at higher standard rates:

• PPh Article 22: 1.5% for goods procurement.
• PPh Article 23: 2.0% for services.

By presenting a Suket, the withholder will only withhold 0.5%, significantly helping the MSME's upfront cash flow.

C. Validity Period

• 7 Years: For Individual Taxpayers.
• 4 Years: For Cooperatives, CVs, Firms, BUMDes, or Individual PTs.
• 3 Years: For Limited Liability Companies (PT).

2. Case Illustrations of Certificate Application

Case 1: Service Transaction (PPh 23 vs Final PPh)

Scenario: CV Kreatif Mandiri (MSME) has a logo design contract worth IDR 10,000,000.

Case 2: Government Goods Procurement

Scenario: Mr. Budi sells desks to the Education Office for IDR 50,000,000.

As a government treasurer (withholder of PPh 22), they would normally deduct 1.5%. With the Suket, they only deduct 0.5% (IDR 250,000), giving Mr. Budi better liquidity.

Case 3: Import of Goods

Suket PP 55 serves as an exemption letter for PPh Article 22 Import. MSMEs pay Nil (0%) at the port, and instead self-deposit 0.5% monthly after the goods are sold domestically.

Case 4: Revocation due to Turnover Threshold

If a CV's turnover hits IDR 6 billion in 2023, the Suket becomes invalid for 2024. The taxpayer must switch to general rates and full bookkeeping.

Conclusion

The Certificate of PP 55 of 2022 is fundamental for MSMEs to secure their 0.5% tax right. It prevents overpayment and administrative hurdles at year-end. Always monitor your validity period and the IDR 4.8 billion threshold to stay compliant.

References:

• Government Regulation Number 55 of 2022.
• Minister of Finance Regulation Number 164 of 2023.
• Law Number 7 of 2021 (UU HPP).
• DGT Circular Number SE-46/PJ/2020.