Economist Reminds Government To Be Careful In Removing Fiscal Stimulus: Business World Still Needs Incentives

JAKARTA - Economic observer from the Center of Reform on Economics (CORE) Indonesia Yusuf Rendy Manilet highlighted the government's attitude that it did not include business incentive clusters in the 2022 National Economic Recovery Program (PEN) period.

According to him, the government's decision must really be based on careful consideration. Moreover, the process of economic recovery that is currently taking place has not yet reached a sufficiently well-established level.

“Indeed, the argument for withdrawing the stimulus needs to be done carefully. Indonesia's unemployment rate has not returned to its pre-pandemic level. This means that there are still age groups of workers who have not been re-absorbed by the current employment opportunities," he said to VOI, Monday, November 22.

Rendy added that the business community actually still needs government support in supporting business activities, such as easing tax regulations.

“Therefore, various efforts to encourage business actors to be able to resume business expansion should need to be supported. One of them is by continuing to provide business incentives," he said.

For information, as of November 19, the business incentive cluster in the 2021 PEN has been able to absorb IDR 62.47 trillion from the IDR 62.83 trillion ceilings.

"Business incentives are the realization of PEN with the largest percentage, meaning that it is relatively needed for business actors," he asserted.

To note, the government provides a budget for the 2022 PEN amounting to IDR 321.2 trillion which is divided into four clusters, namely health, community protection, priority programs, and support for MSMEs and corporations.

Meanwhile, PEN 2021 has a ceiling of IDR 744.77 trillion distributed to the four clusters, including business incentives.

Through the decision to abolish business incentives in PEN next year, it is estimated that there will be no more policies for eliminating PPh 21 workers, MSME final Income-tax (PPh), exemption from import PPh 22, reducing PPh 25 installments, to property VAT and automotive Luxury Sales Tax (PPnBM) borne by the government in the 2021 PEN.