epajak.or.id – President issues rules for debt relief for MSMEs. Check out the requirements here!
President Prabowo Subianto has just promulgated Government Regulation (PP) No. 47 of 2024, which provides a breath of fresh air for Micro, Small and Medium Enterprises (MSMEs) in the agriculture, plantation, livestock, fishery and marine sectors. PP 47/2024 was promulgated yesterday, 5 November 2024, and will be effective up to 6 months from the date of its promulgation. This PP allows the write-off of bad debts of MSME operators who are no longer able to repay their debts. This move is in line with the government’s efforts to provide concrete support to the MSME sector, which is considered to be the backbone of the national economy.
Previously, bad debt write-off was a policy that relieved enterprises from the obligation to pay their debts that were no longer repayable, especially due to difficult financial conditions. Article 1(8) of PP 47/2024 states that the absolute write-off activity is the elimination of the State’s claims by eliminating the State’s right to collect these claims. In the context of PP 47/2024, this write-off applies to debts due for more than 10 years, with certain nominal limits.
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Terms and conditions of MSME debt waiver
Write-off of government receivables can be done no earlier than 3 months after the decision is taken and no later than the expiry of PP 47/2024. However, not all MSMEs can benefit from this policy, as there are several key requirements that MSMEs must meet.
Firstly, the policy takes into account the financial situation of the MSME in paying off the debt. MSMEs applying for debt write-off must prove that they really do not have the financial capacity to pay the debt.
The maximum amount of debt that can be written off is IDR 500 million for a business entity and IDR 300 million for an individual, with a period of time during which the debt has been in arrears of approximately one year.