SEC-S20W4 | My Business Ideas | Registration, License, and Taxes

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Hello everyone. This is the fourth week with another interesting discussion about business. And this time, I will explain some questions about Registration, License, and Taxes. Of course this is important in building a business and here is the explanation;

Section 1- We are interested to know about the registration procedure of your business in your country and how you manage it.

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The business registration procedure in my country varies greatly depending on how big your business is or your business category (UMKM business and having a Company) are 2 different things. Currently I will choose the part of the business that I run, namely UMKM (Micro, Small and Medium Enterprises).

MSMEs are productive businesses owned by individuals or business entities that have met the criteria as micro businesses. Well, in this criterion, the type of knick-knack business that I run is included in Small Dynamic Enterprise, namely MSMEs that already have an entrepreneurial spirit and are able to accept subcontract and export work.

In building this business, I must obtain a permit so that my business runs smoothly and legally. The following are the requirements for establishing MSMEs;

• Indonesian citizen (WNI)
• Have a Population Identification Number (NIK)
• Have an MSME business
• Not an employee of BUMN, BUMD, PNS, and TNI/POLRI
• Have a Business Certificate (if you have a different KTP and business domicile)
• Not in a loan period at a bank or People's Business Credit (KUR)

Well, when all the above requirements are met, then we must follow the Indonesian government regulations that govern this MSME business system. Government regulations regulate, among others, the convenience, protection, and empowerment of Cooperatives, the convenience, protection, and empowerment of MSMEs, the implementation of Incubation, and Special Allocation Funds for the convenience, protection, and empowerment of Cooperatives and MSMEs. In addition, provisions are also regulated regarding the Central Government and Regional Governments that provide convenience, protection, and empowerment for cooperatives and MSMEs through coaching and provision of facilities.

Furthermore, Ministries/institutions and Regional Governments, BUMN, BUMD, and/or private business entities are required to provide promotional and development places for Micro and Small Businesses of at least 30% (thirty percent) of the total area of ​​commercial land, shopping area, and/or strategic promotional places on public infrastructure.

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Section 2- Tell us all about the procedure to obtain any license/permit etc. to run your business.

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Of course, my business must get approval from the government. Well, here are the requirements for registering UMKM;

• Photocopy of KTP.
• Photocopy of KK.
• NIB (Business Identification Number).
• Photo of UMKM that I run.
• SPTJM (Absolute Responsibility Statement).
• SKU (Business Certificate).
• IUMK (Micro and Small Business Permit).

For SPTJM, you can get it at the local Cooperative and SME Office. As for SKU, you can get it at the local village office. As for NIB and IUMK, I can register my business online on the official OSS website.

The business I run is not a big business, if my business is listed on the official page with a business number, then I can run it. I only need recognition and also the truth of my business in the area where I live, and if I want to develop my business into a PT or CV business, then I must complete the approval process at the Ministry of Law and Human Rights.

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I did not encounter any obstacles or "under the table" payments for my business. Because as I said that this is a small business and so far all parties have even supported the development of this business by lending their capital with a payment process on a scale (per month) and for the past 5 years I have felt the benefits.

I also do not involve any party such as officers/inspectors, in my country especially my area, I can still get this permit easily even though there are letters and documents that must be completed as I have described above.

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Section 3- What is the tax structure for traders/manufacturers

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One of the main sources of state revenue still comes from taxes. If tax revenues increase, it will certainly have an impact on the effectiveness of development that is running smoothly.

Quoted from Pajak.go.id, Law No. 20 of 2008 concerning Micro, Small and Medium Enterprises, the classification of MSME actors can be distinguished, namely micro businesses that have maximum assets of IDR 50 million and a maximum turnover of IDR 300 million. MSME actors are also subject to income tax rates. Referring to Government Regulation (PP) No. 23 In 2018, the UMKM sector tax rate, which was originally 1%, was reduced to 0.5%. And taxpayers are calculated for up to 7 years with a turnover of 4+ billion.

Well, based on this, if calculated, my maximum asset value per year is not up to 30 million. 30x5 = 150 million and this value is very far from the turnover of 7 years and my business is still tax-free. "And I hope to be able to pay taxes".

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Section 4- What are the options in case you face any tax-related problems?

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I do not close my eyes and ears if someone says that someone does not pay taxes or manipulates tax receipts. This could happen to individuals who have the power and loopholes to do so. ***

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Not to mention paying it, they even take other people's taxes illegally. Many business people in my country are still looking for personal gain. Even many mines and companies are not operating under "Indonesian Citizens". Therefore, the government also regulates all actions of business actors in the 1945 Constitution.

Tax legislation that regulates general provisions and tax procedures that have been in effect since January 1, 1984 is Law Number 6 of 1983 concerning General Provisions and Tax Procedures. Law Number 6 of 1983 is based on the philosophy of Pancasila and the 1945 Constitution

Because there is a Law that regulates taxation, if anyone violates the Government Regulation on taxation, whoever the perpetrator is will be subject to a fine or imprisonment.

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This is a great lesson on discussing Registration, Licenses, and Taxes. Thank you for this course to @dove11 and @aviral123.
I also invite my friends @waterjoe @neukyan @paholags in this SEC-S20W4.

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^{Thank you also for supporting me at every opportunity}