Analysis of the Impact of the 12% VAT Increase on the Financial Performance of MSMEs in Indonesia

  • Putri Intan Prastiwi Duta Bangsa University
  • Novemy Triyandari Nugroho Duta Bangsa University
  • Agus Suyatno Duta Bangsa University
  • Primadia Putri Harmastuti Duta Bangsa University
  • Shoffin Tasnim Aulia Duta Bangsa University
DOI: https://doi.org/10.36728/iceete.v3i1.224

Abstract

The increase in the Value Added Tax (VAT) rate from 11% to 12% has raised concerns about the sustainability of Micro, Small, and Medium Enterprises (MSMEs), especially those that are not yet digitized and have not been registered as Taxable Entrepreneurs (PKP). These MSMEs are likely to face additional burdens such as production and administrative costs, reduced profit margins, and declining consumer purchasing power. This study aims to analyze the impact of the VAT rate increase on the financial performance of MSMEs in Indonesia. A descriptive qualitative approach was employed through a literature study method. Data were obtained from nationally indexed journals in the SINTA database, the ISSN portal, official reports from the Ministry of Finance, and publications by Statistics Indonesia (BPS). Samples were selected purposively, focusing on MSMEs directly affected by the VAT policy. The data were analyzed using a narrative comparative method, comparing MSME conditions before and after the implementation of the 12% VAT rate, using indicators such as sales, operating costs, and profit margins. On the other hand, the policy may encourage greater efficiency, digitalization, and product innovation among MSMEs. The findings indicate that the impact of the VAT policy varies depending on the business scale and administrative readiness of each enterprise. Therefore, this study recommends tax assistance, administrative guidance, and simplification of tax compliance procedures to strengthen the resilience and sustainability of MSMEs amid fiscal policy changes.

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Published
2025-07-22
How to Cite
Prastiwi, P. I., Nugroho, N. T., Suyatno, A., Harmastuti, P. P., & Aulia, S. T. (2025). Analysis of the Impact of the 12% VAT Increase on the Financial Performance of MSMEs in Indonesia. ICEETE Conference Series, 3(1), 1-5. https://doi.org/10.36728/iceete.v3i1.224
Issue
Vol. 3 No. 1 (2025): 2025 - 3rd ICEETE
Section
Articles

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