Banjarmasin – Shinta Laksmi Dewi, Chairwoman of the South Kalimantan Chamber of Commerce and Industry (Kadin Kalsel), believes that the government's decision to end the 0.5% Final Income Tax (PPh Final) facility for Micro, Small, and Medium Enterprises (MSMEs) for certain business entities will place additional pressure on businesses that are still grappling with various economic challenges.

According to Shinta, businesses are currently struggling with rising operational costs, including labor expenses, tax administration obligations, high logistics costs, and the weakening rupiah exchange rate, all of which have contributed to increased production costs.

“Particularly for partnerships, limited partnerships (CVs), and limited liability companies (PTs), this policy will certainly be quite burdensome. Businesses are currently facing numerous challenges. There have been increases in operating costs, workers’ wages, administrative obligations, as well as economic conditions that have not yet fully recovered. Therefore, any change in tax policy will inevitably have a direct impact,” Shinta said in Banjarmasin, South Kalimantan, on Tuesday (June 2, 2026).

She explained that, in the short term, the increase in tax burdens could reduce corporate profit margins. This, in turn, could affect business competitiveness and eventually impact consumer purchasing power.

“When business costs rise, profit margins decline. When margins shrink, companies have less room to expand. Ultimately, competitiveness weakens, and consumers may also be affected as the prices of goods and services could increase,” she said.

Nevertheless, Shinta acknowledged that the government has valid reasons for strengthening state revenues through taxation. In her view, higher state revenues would contribute to healthier fiscal conditions and better economic stability.

“In the long term, we remain optimistic. If state revenues increase and fiscal conditions remain sound, the government will have greater capacity to support development and maintain economic stability. That would certainly be beneficial for national economic growth,” she said.

However, Shinta emphasized that any increase in tax burdens must be accompanied by improvements in the business climate and reductions in non-productive costs that have long been a concern for the business community.

“If the government expects greater contributions through taxation, there must be some form of compensation. This could include legal certainty, legal protection, ease of doing business, and the elimination of non-productive costs. Businesses should not be required to pay higher taxes while still being burdened by various other costs with unclear benefits,” she stressed.

She also highlighted the issue of Indonesia’s high logistics costs, which have long been one of the main obstacles facing businesses. According to her, the government needs to find solutions to reduce distribution costs so they do not further burden the private sector.

One area she specifically pointed to was fuel pricing policy, particularly diesel fuel. Shinta believes an evaluation is necessary to ensure that price disparities in the market do not create opportunities for irregularities that ultimately harm both businesses and the public.

“If logistics costs can be reduced, businesses will be in a stronger position to cope with other rising expenses. Product prices can also become more competitive, benefiting both businesses and consumers at the same time,” she said.

Regarding MSMEs, Shinta noted that this segment is likely to be among the most vulnerable to changes in tax policy, as many small businesses operate with limited capital and cash flow.

“MSMEs will certainly feel the impact. They have become accustomed to a relatively light tax burden. When the tax rate or mechanism changes, it will inevitably affect their business cash flow,” she said.

For that reason, she urged the government not only to focus on increasing state revenues but also to prepare various support programs to help MSMEs remain resilient and continue growing.

“If the government has strong reasons for adjusting tax policies, then solutions must also be provided for businesses, particularly MSMEs. These could take the form of energy subsidies, easier access to financing, capital assistance, or other policies that help reduce operating costs,” Shinta said.

According to her, the success of tax policy should not be measured solely by higher state revenues, but also by the government’s ability to maintain a balance between fiscal needs and business sustainability.

“We all want the country to have strong revenues. But at the same time, businesses must continue to grow. After all, businesses are the ones that create jobs, drive economic activity, and ultimately generate the very revenues that support the state,” she concluded.