Tax Expenditures During The Pandemic Are Focused On Support For National Economic Recovery

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The government through the Ministry of Finance (Kemenkeu) stated that tax incentives or tax expenditures in the last three years the COVID-19 pandemic have continued to be optimized as a cushion to prevent deeper contractions while at the same time supporting the acceleration of national economic recovery.

Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, said that significant tax expenditures occurred in the 2021 period focusing on four things. First, accelerating and strengthening the procurement of medical needs for handling the pandemic.

"Second, the relaxation of cash flow for business actors who are still affected by the pandemic," he said while giving a press release, Monday, December 26.

Third, he argues, encouraging the acceleration of recovery of potential and strategic sectors. And the fourth is the implementation of the sustainability of structural reforms and the acceleration of economic transformation.

"Looking at the economy in 2020 contracting deeply, the government provides greater tax incentives in 2021 to encourage more targeted and measurable recovery to respond to dynamic pandemic conditions and support efforts to accelerate economic transformation," he said.

According to Febrio, the tax spending report for the 2021 period is an important document to inventory and evaluate various tax incentives, including incentives provided by the government in the context of handling the impact of the COVID-19 pandemic.

"The 2021 tax expenditure report can also be the basis for evaluating the 2022 policy, especially policies related to handling the pandemic," he stressed.

Sri Mulyani's subordinate also said that with the increase in the use of facilities due to the increasingly recovering economy and the addition of incentives in the context of dealing with the impact of COVID-19 which only took effect in 2021, tax spending in 2021 reached IDR 299.1 trillion or 1.76 percent of GDP.

"This value increased 23.8 percent compared to tax spending in 2020 which was valued at IDR 241.6 trillion or 1.56 percent of GDP," closed Febrio.