Indonesia Just Raised Its Corporate Tax From 0.5% to 22% | Here's What It Means #indonesia #economy

[00:00:00]Indonesia is raising its corporate tax from 0.5% to 22%. If you are running a company in Indonesia, this is going to cost you. Supreme Leader Prabowo recently signed PP20 of 2026, which means PT and CV businesses no longer pay 0.5% of their gross revenue. Instead, they must pay the standard corporate rate of 22% of their net profit. [music] So, let's say your average mom-and-pop catering business turning 1 billion rupiah annually with 300 million in [music] profit used to pay 5 million taxes. And now it has to pay 33 million.

[00:00:30]That difference is enough to buy a Honda Vario. This policy creates a ripple effect which affects everyone. [music] When a company's tax bill jumps by 560%, the first thing they do is cut staff.

[00:00:41]And when they can't cut anymore, they start to raise prices.

[00:00:44]>> [music] >> When prices go up and people lose their jobs, this is the recipe for another economical crisis. So, why not downgrade to an OM game instead? Well, [music] a PT or a CV is what gets you liability protection, access to government contracts, and the ability to have partners. For a lot of small business owners, they're going to be stuck paying the higher [music] rate just for being properly registered, which feels like the wrong people is being punished yet again. And now with the rupiah hitting its all-time low, investors are already nervous and calculating your bottom line is far more subjective than calculating revenues, [music] which creates exactly the kind of gray areas that companies with expensive lawyers know how to exploit while small businesses just end up paying [music] more. Over 80% of Indonesia's revenue already comes from its own people. If this money was visibly going back into infrastructure, education, health care, or at the very least introducing better [music] tax incentives, nobody would complain. But it isn't, and everyone knows it. This is exactly why I registered my own company in Hong Kong in '18 because