The Indonesian government announced on March 13 that it will allocate 120 trillion rupiah (8.1 billion USD) from the state budget to stimulate the economy by providing tax incentives and subsidies for workers, businesses and families affected by the COVID-19 outbreak.
Finance Minister Sri Mulyani Indrawati said that workers in the manufacturing who make 200 million rupiah or less a year will be exempted from income taxes for six months.
The government also cuts the corporate income tax rate by 30 percent for six months and deferred import tax payments for six months for 19 manufacturing industries. It will also speed up repayments of overpaid tax without initial audits.
Besides, the government has introduced a non-fiscal stimulus package that aims to ease current restrictions and accelerate export-import activities.
In the financial sector, the Financial Services Authority (OJK) announced it will allow banks to issue new policies to stimulate economic growth, especially for borrowers affected by the COVID-19 outbreak, including micro, small and medium sized enterprises (MSMEs). The policies include the relaxation of credit assessment and restructuring requirements.
According to Minister Indrawati, the stimulus package is not the last announcement amid the outbreak, and her ministry will assess the situation to mitigate and minimise the impacts.
Last month, Indonesia announced its first stimulus package worth 10.3 trillion rupiah to support consumer spending and tourism.
Source: China ASEAN Business Council