Indonesia issue new incentives to counter Covid-19 impact on economy. The new incentives will give tax relaxation for income tax for individual worker (PPh 21), import tax (PPh 22), income tax for corporate (PPh 25) and accelerated VAT restitution. With this fiscal stimulant, government expect there will be 22.9 trillion 2020 state budget revenue loss
The government released second fiscal stimulus package as business suffer from pandemic Covid-19 effect. This fiscal stimulus is estimated to cost around 22.9 trillion rupiah of state budget revenue loss.
Finance Minister Sri Mulyani Indrawati said that the fiscal stimulus focus on the industrial sectors that most affected by the Corona virus. She claims all these incentives should help companies increase its cash flow.
“From the demand side of consumption, investment, and the supply chain business sectors, especially manufacturing, there is disruption on an export-import. Therefore, the second stimulus is indeed focused on the production sector, “he said on Friday (3/13/2020).
There are four policies in the stimulus package. First, the income tax (PPh) article 21 exemption for manufacturing industries workers, with wage below 200 million rupiah per year. This stimulus is effective for next April to September 2020. This stimulus worth 8.6 trillion rupiah.
Second, relaxation (postponed) of article 22 PPh on imports tax for 6 months, from April to September 2020. However, this policy only applies to 19 specific manufacturing industry sectors determined based on recommendations from Kadin and Apindo. This relaxation is estimated to reach 8.15 trillion rupiah.
Third, reducing Article 25 income tax on companies by 30% for 6 months. This policy will provide cash flow space for the industry. The policy also applies to 19 specified manufacturing industries. This stimulus is estimated worth 4.2 trillion rupiah.
Fourth, the speed up for VAT refunds process for exporters for 6 months to help their liquidity for 19 determined manufacture industries. With the acceleration of the restitution, according to Sri Mulyani, the company can be more optimal in managing its cash flow.