Indonesian government is preparing additional incentives for the industrial sector was affected by the COVID-19 pandemic, said industry minister on Thursday (06/11) - Photo by Industry Ministry

JAKARTA (TheInsiderStories) – Indonesian government is preparing additional stimulus for the industrial sector was affected by the COVID-19 pandemic, said industry minister on Thursday (06/11). This strategic step is to revive the enthusiasm of business people so that it can drive the wheels of the national economy.

“The government is currently intensively discussing various additional incentives or stimuli that are indeed needed by the industrial sector in order to be stretched again,” the minister, Agus Gumiwang Kartasasmita said in a written statement.

He adds, the additional incentives included waiving payments of electricity to state power producer PT Perusahaan Listrik Negara (PLN). This policy is proposed for the subscription period of April 1 to Dec. 31, 2020. The proposal is in the form of eliminating the minimum cost for using 40 hours of electricity consumption, including for premium industrial customers who use 233 hours of electricity consumption.

“The amount of stimulus is Rp1.85 trillion (US$132.14 million) for nine months,” he explained.

Another stimulus is the delay payment of 50 percent PLN’ bills during April to September 2020 with guaranteed installments in the form of demand deposits backwards for 12 months. He also proposed deletion of late payment penalties.

In addition, said the minister, the government was reviewing incentives in the form of eliminating value added tax (VAT) for local raw materials for export, postponing the tax payments for 90 days without fines, as well as temporary release of Article 25 income tax installments.

“Providing additional tax breaks for the industrial sector will complement other incentives that have been released previously by the government,” said Kartasasmita.

He added, the incentives for industry players that have been launched include the exemption of import tax (Article 22), installments of 30 percent tax (Article 25), accelerated VAT refunds, and additional incentives for companies receiving bonded zone facilities or ease of import for export purposes for handling the COVID-19 pandemic.

Beside, said the minister, his party had also proposed credit restructuring and working capital stimulus. This incentive will be provided with a number of criteria, such as a track record of taxes and credit installments, has good business prospects, employment, heavy impact of the virus, and maximizing the use of domestic raw materials.

Next, with regard to the minister of energy and mineral resources decree Number 8 of 2020 concerning natural gas prices for the industrial sector, the proposed point is the abolition of the minimum payment per contract, and payment in accordance with the amount of usage.

“With these efforts, it is certainly expected that the industry can continue to grow and the national economy can continue to be maintained on a positive trend,” he asserted.

In addition, the government seeks to encourage domestic market consumption by increasing utilization through the implementation of domestic raw material in ministries and institutions as well as state-owned enterprises. In addition, increased the domestic demand.

Chairperson of the Indonesian Employers’ Association Hariyadi Sukamdani rated, to be able to recover, the business world needs a working capital stimulus at least in the form of interest subsidies to adjust the Bank Indonesia benchmark interest rate, which is now pegged at 4.5 percent. He revealed, the textile and textile product sector needed a budget of Rp283.1 trillion, a food and beverage industry of Rp200 trillion, a footwear industry of Rp99 trillion, and the electronics and household electrical equipment industry was projected to reach Rp407 billion

Written by Staff Editor, Email: theinsiderstories@gmail.com