Amidst rapid technological advances, the digitaMSMEslization of financial and tax management has become an urgent necessity for micro, small, and medium-sized enterprises (MSMEs). Digital systems not only enhance data accuracy but also expedite reporting, streamline analysis, and foster trust with external stakeholders, such as banks and investors.
“Unfortunately, MSME actors still face barriers such as low digital literacy, high technology adoption costs, and resistance to change,” said a lecturer at the Department of Economics and Business, Vocational College, Universitas Gadjah Mada (SV UGM), Siti Muslihah.
Muslihah delivered her remarks during the UMKM Class Series #29 seminar on Financial and Tax Governance for MSMEs, held at Meeting Room 1, UGM Directorate of Community Service, on Wednesday (Sep. 17).
Muslihah emphasized that sound financial management forms the foundation of business sustainability.
Systematic bookkeeping, separating personal and business finances, and preparing accurate financial reports are crucial steps for monitoring business health, making informed strategic decisions, and accessing financing.
Citing survey results, she noted that 77 percent of MSME actors already keep financial records, but most still rely on manual methods and have yet to adopt digital applications—only 46 percent consistently separate personal and business finances.
“This condition directly affects their ability to manage cash flow, analyze performance, and design growth strategies,” she explained.
The seminar also featured insights from Edy Wahyudi, a certified tax consultant at Bijak Karyamitra Yogyakarta, and Wahyu Triatmojo, a coordinator of consultants at the Integrated Business Service Center for Cooperatives and MSMEs in Yogyakarta Special Region.
The session was moderated by Sugiyarto, a lecturer at the Faculty of Agriculture (Agriculture UGM)
Edy Wahyudi emphasized that taxation plays a crucial role in promoting professionalism among businesses.
However, tax literacy in Indonesia remains low, with only about 50 percent of the population understanding basic tax concepts.
“Tax compliance among MSMEs also continues to be a challenge,” he added.
Data from the Directorate General of Taxes shows that MSMEs contributed only around 1.1 percent of total income tax revenue in 2019, equivalent to IDR 7.5 trillion.
Moreover, over 61 percent of MSMEs have not taken advantage of the final income tax rate of 0.5 percent, which is designed to ease their tax burden.
“Low awareness, limited outreach, and negative perceptions of tax administration remain the main obstacles. Yet proper tax compliance not only fulfills legal obligations but also strengthens MSMEs’ position with investors, business partners, and consumers, while unlocking opportunities to benefit from tax incentives,” he explained.
Wahyu Triatmojo expressed optimism that with sound financial management, MSMEs could grow faster and operate more sustainably. Business actors, he noted, require financial literacy to develop effective business strategies.
Dr. Rustamaji, UGM Director of Community Service, emphasized that in today’s dynamic global economy, MSMEs must operate with greater efficiency and transparency.
Without proper bookkeeping, businesses struggle to accurately measure profitability, effectively control costs, and identify potential growth opportunities.
Likewise, without adequate tax knowledge, they risk sanctions or miss opportunities to access incentives.
“The challenges ahead will only become more complex, from tight market competition, raw material price fluctuations, and shifting tax regulations to increasing demands for transparency from partners and consumers. Systematic efforts are therefore needed to improve the financial and tax literacy of MSME entrepreneurs,” he said.
Author: Agung Nugroho
Post-editor: Rajendra Arya