JAKARTA - The World Health Organization (WHO) has announced that the corona virus outbreak or COVID-19 has become a pandemic. This condition urges governments around the world to increase prevention efforts in order to minimize the economic impact caused by the virus.
The Indonesian government, today, Friday 13 March, officially released the second phase of the stimulus policy, which covers fiscal and non-fiscal sectors to deal with the impact of COVID-19.
Coordinating Minister for the Economy Airlangga Hartarto said that due to the COVID-19 outbreak, the impact on the economic sector was inevitable. World economic growth is projected to contract further.
"For this reason, the government pays attention to issues that require special policies. The government will issue a second fiscal and non-fiscal stimulus," he said, at a Press Conference on the Second Economic Stimulus for Handling the Impact of COVID-19, at the Kanto of the Coordinating Ministry for the Economy, Gambir, Jakarta, Friday, March 13th.
Airlangga explained, issues that need special handling are the availability of food stocks and supplies which will affect the stability of food prices. Then, travel restrictions and worker mobility affect the tourism and transportation sectors.
Then, continued Airlangga, disruption of production, distribution and supply chains that affected the performance of the manufacturing sector and its derivatives. Not only that, the fall in world oil prices due to weakening demand and the war on oil prices between Saudi Arabia and Russia is also something to watch out for.
Fiscal Stimulus in the Context of Handling COVID-19
Finance Minister Sri Mulyani said that in responding to the development of the impact of COVID-19 on the economy, the government would continue to respond. In the first stage the risk is limited to tourism only, but after one month it develops into a pandemic which clearly gives a bigger risk impact.
"The situation is still very dynamic. We will continue to be open to the existing situation and continue to mitigate the impact, because the impact cannot be eliminated. Good for companies, corporations and the community," he said.
The government will provide relaxation of Article 21 Income Tax (PPh 21). Relaxation is provided through the Government Borne PPh Article 21 (DTP) scheme of 100 percent of the income of workers up to IDR 200 million in all sectors of the manufacturing industry.
Sri Mulyani said that this relaxation also includes ease of import for export destinations (KITE) and ease of import for export destinations for small and medium industries (KITE IKM). PPh DTP is given for six months, starting from April to September 2020.
"The amount borne by the government is Rp. 8.60 trillion. It is hoped that workers in the manufacturing sector will receive additional income to maintain purchasing power," he said.
Then, continued Sri Mulyani, the government also provided relaxation of import income tax article 22 (PPh 22). Relaxation is given through the import PPh Article 22 exemption scheme for 19 certain sectors. This relaxation applies to KITE, and KITE IKM. Article 22 Import Income Tax exemption is granted for six months starting from April to September.
"The total estimated exemption is Rp8.15 trillion. This policy is taken as an effort to provide cash flow space for the industry as compensation for switching costs or costs related to changes in the country of origin of imports. Our estimates are that in terms of income tax that will not be paid, the company is expected to be able to maintain production," he said. .
Sri Mulyani explained, for this PPh 22 companies that will import goods will not be taxed for six months. This relaxation is just a delay. However, after six months if the government does not provide an extension of the relaxation, then the company must pay taxes in the month after the relaxation ends, including the postponement of the previous six months.
"If they import PPh 22, he immediately pays it. Now we do not collect it so we are not affected again, but it must be calculated at the end of the year. If it turns out that the end of year tax is low it might even be returned," he explained.
The government, continued Sri Mulyani, also provides relaxation of income tax article 25 (PPh 25). Relaxation is provided through a 30 percent reduction in PPh Article 25 to 19 certain sectors recommended by Kadin and Apindo. Valid not only for KITE, but also KITE-IKM for six months starting from April to September.
"The total estimated reduction is Rp. 4.2 trillion. The government will provide cash flow space for the industry as compensation for switching costs for moving countries of origin for imports and expansion of export destination countries. This is done to maintain domestic economic stability and it is hoped that exports can increase," he explained.
Regarding PPh 25, said Sri Mulyani, it was also a delay. This means that companies or entities that previously paid taxes in installments are granted a temporary exemption for six months. However, at a later date the annual calculation will be seen if the company experiences a loss then the tax will not be collected.
"PPh 25 is a corporation that installs taxes every month according to their estimate. Usually uses the base line of the previous year. So if last year he was high, then he had to pay high installments. So today the company does not need it anymore, later at the end of the year we will see if it lost. no need to pay taxes. So this delay for the company is very helpful, "he said.
Apart from that, said Sri Mulyani, the government has also provided relaxation of Value Added Tax (VAT) refunds. Relaxation is given through VAT refunds, accelerated preliminary returns for 19 certain sectors, WP KITE, and WP KITE-IKM. Accelerated VAT refunds are given for six months, starting from April to September. The total estimated amount of restitution is IDR 1.97 trillion.
"There is no limit to the value of VAT refunds specifically for exporters, while for non-exporters, the amount of VAT refunds is set at a maximum of Rp. 5 billion. With the acceleration of restitution, taxpayers can more optimally maintain their liquidity," he explained.
Non-Fiscal Stimulus in the Context of Handling COVID-19
In order to complement the fiscal stimulus policy package that was delivered, Sri Mulyani said the government had also prepared a non-fiscal policy package aimed at giving more impetus to export-import activities.
First, said Sri Mulyani, the government will simplify and reduce the number of restrictions and restrictions (Lartas) for export activities with the aim of increasing export smoothness and competitiveness. In this case, the Health Certificate and V-Legal documents are no longer required for export unless required by the exporter.
"The implication is that there is a reduction in export Lartas by 749 HS codes consisting of 443 HS codes for fish and fish products and 306 HS codes for forestry industrial products," he said.
Second, continued Sri Mulyani, simplification and reduction of the number of restrictions and restrictions (Lartas) for import activities, especially raw materials, with the aim of increasing the smoothness and availability of raw materials.
This stimulus is given to companies with status as producers and at the initial stage it will be applied to products of steel, alloy steel, and their derivative products which will then also be applied to strategic food products such as industrial salt, sugar, flour as raw materials for the manufacturing industry.
Related to duplication of import regulations, the Government will also make simplifications, especially on commodities, horticulture, animal and animal products, as well as drugs, medicinal ingredients and food.
Third, said Sri Mulyani, the acceleration of the export and import process for reputable traders, namely companies related to export-import activities that have a high level of compliance. In principle, companies with good reputations will be given additional incentives in the form of accelerating the export and import process.
Additional incentives include the implementation of auto response and auto approval for Lartas processes both for export and import as well as the elimination of surveyor reports on mandatory commodities. To date, there are 735 reputable traders consisting of 109 Authorized Economic Operators or AEO companies and 626 companies classified as Main Partners of Customs or MITA.
Fourth, he said, improvement and acceleration of export-import process services, as well as supervision through the development of the National Logistics Ecosystem (NLE). NLE is a platform that facilitates collaboration in information systems between government and private agencies to simulate and synchronize the flow of information and documents in export or import activities at ports and trade activities or distribution of domestic goods through data sharing, business process implications, and elimination of repetition, and duplication. .
The NLE roadmap includes, among other things, integration between INSW, Inaport, Inatrade, CEISA, trucking systems, warehouse systems, transportation systems, operator terminal systems, and others. It is hoped that with the presence of this NLE, it can improve national logistics efficiency by integrating government services (G2G2B) with existing logistics platforms (B2B).
For your information, the 19 industries that received PPh 22 and PPh 25 relaxation were:
1. Chemical and chemical products industry
2. Electrical equipment industry
3. Manufacture of motorized goods trailers and semi trailers
4. Pharmaceutical industry, chemical medicinal products and traditional medicines
5. Basic metal industry
6. Other transportation equipment industry
7. Paper and paper goods industry
8. Food industry
9. Computer industry, electronic and optical goods,
10. Machinery and equipment industry
11. Textile industry
12. Rubber and goods made of rubber and plastics industry
13. Furniture industry
14. Printing industry and recording media reproduction
15. Non-metal mineral goods industry,
16. Non-machined metal goods industry and its equipment
17. Finished material industry
18. Beverage industry
19. Leather and leather goods and footwear industry.
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