Entrepreneurs Scream To Jokowi: PPKM Builds Malls, Hotels And Restaurants Bleeding

JAKARTA - Businessmen in shopping centers or malls, restaurants, and hotels have asked for the Restriction of Community Activities (PPKM), which began on January 11, to be discontinued. They admit that they are getting worse in order to survive in their current conditions.

Chairman of the Association for the Management of the Indonesian Shopping Center (APPBI) for DKI Jakarta, Ellen Hidayat, said that the policy caused visits to shopping centers in DKI Jakarta to fall by around 8 percent to 32 percent.

Whereas before the PPKM was implemented, the level of visits to shopping centers or occupations was 40 percent from the normal condition before the pandemic. The decrease in the number of visitors was due to restrictions on the operating hours of the shopping center which only lasted 19.00 WIB.

Moreover, said Ellen, only 25 percent is allowed to dine in or eat at the place, plus the 75 percent work from home (WFH) rule and only 25 percent are allowed to work from office (WFO). According to Ellen, this condition forces shopping centers and tenants to reduce labor.

"This policy has a very broad impact on shopping centers. From the results of our monitoring since January 11, 2020 until today, the traffic which was 40 percent has only reached an average of around 32 percent. In fact, some shopping centers reached 30 percent. So it dropped around 8 percent, "he said, a virtual press conference, Monday, January 18.

Not only that, said Ellen, around 15 percent of retailers and tenants also stopped leasing because the lease had expired, so that in the future there would be vacancies in shopping centers. In fact, according to him, shopping centers have always been disciplined in implementing health protocols.

"Until now, we need to emphasize that shopping centers in DKI Jakarta are not a COVID-19 cluster. Meanwhile, the regulations that are always imposed on us, whenever any regulations appear, every PSBB or PPKM is always the shopping center becomes the target of shooting," he said.

Deputy Chairman of the Indonesian Hotel and Restaurant Association (PHRI) Emil Arifin said that thousands of restaurants have the potential to close permanently if the government extends the implementation of the Java-Bali PPKM. This figure is specific to DKI Jakarta.

"In the end this will have an impact on the lay off (reduction in workers), more employees will be affected," Emil said in a virtual press conference, Monday, January 18.

He explained that the results of a survey conducted by PHRI of 4,800 restaurants in DKI Jakarta in September-October 2020, recorded that 1,030 restaurants were permanently closed and 400 restaurants temporarily closed.

Furthermore, Emil said, this could not be separated from the policy of restricting activities that had been repeated over the past year. Many restaurants are unable to withstand the economic pressures caused by the COVID-19 pandemic.

"If this (PPKM) is extended, maybe up to 1,600 restaurants are permanently closed," Emil said.

Emil said, business uncertainty during the pandemic was very high, because every two weeks the government always evaluated the next restriction policy. This makes it difficult for entrepreneurs to make long-term business plans.

Chairman of the Indonesian Hotel and Restaurant Association (PHRI), Hariyadi Sukamdani, noted that the hotel industry has the potential to lose around IDR 50 trillion in revenue due to the COVID-19 pandemic and the government's policy of limiting activities.

Hariyadi said, the COVID-19 pandemic and various restrictions have made the company's cash flow increasingly depressed throughout 2020.

"We estimate that during 2020, we will lose at least Rp 50 trillion in potential revenue for nearly 800 thousand rooms," he said, in a virtual press conference on Monday, January 18.

According to Hariyadi, the current condition of the Restriction of Community Activities (PPKM) in Java and Bali is considered to further suppress cash flow in the business sector in various fields. So that he said, termination of employment (PHK) could not be avoided.

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"So that there is no lay-off? This really depends on cash flow. If it continues to be depressed it cannot be avoided," he said.

Hariyadi explained that during the last 11 months there had been a significant reduction in the workforce. However, it is not a pure layoff, because if this is the case, the employer must pay severance pay, which is burdensome.

Chairman of the Indonesian Employers' Association (Apindo) Hariyadi Sukamdani said that if the government is determined to continue the policy of strictly limiting activities and activities after January 25, 2021, the government will be asked to provide a number of assistance to business actors.

The goal, said Hariyadi, was for entrepreneurs to breathe and continue their business amid the widespread impact of the COVID-19 pandemic.

Some of the assistance in question is that they can still apply for or get additional working capital either from government grants or from banking funds for entrepreneurs who have restructured credit due to the impact of the pandemic.

Hariyadi also suggested that tenants in shopping centers be assisted with payment of rental fees and service charges so that they can continue to open their business and contribute to the consumption sector.

A number of flexibility related to taxes can be in the form of elimination or reduction of tax payments by local governments, namely restaurant tax, hotel tax, advertisement tax, entertainment tax, PBB.

Meanwhile, the taxes collected by the central government are in the form of eliminating or reducing the payment of various types of taxes including VAT for electricity billing, final income tax of Article 4 paragraph 2 or also known as Rental Income Tax. In this case, Hariyadi requested that the rental income tax for mall owners, retailers and tenants be reduced or exempted.

Meanwhile, Chairman of the DPD DKI Jakarta Indonesian Shopping Center Management Association (APPBI) Ellen Hidayat revealed that shopping centers have never received any incentives. Including rental income tax of 10 percent, the most important thing is that mall entrepreneurs hope to be reduced or eliminated.

In fact, said Ellen, during the nine months of the implementation of social and activity restrictions, mall entrepreneurs were forced to share the burden with retailers. Shopping center entrepreneurs like it or not help retailers to free rent money so that the mall is not quiet.

"During these nine months, on average, between six and seven months, the rent has been made free to tenants. If not, tenants will have difficulties. Moreover, now there are restrictions on operating hours and so on," he said.

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