Name : Kadek Yuki Andika

ID : 18/424265/PA/18370

Indonesia To Issue Larger Tax Breaks to Cover 11 More Sectors

Quote
“Tax revenue will face heavy pressure over the next several months as economic activities
slow down, fiscal stimuli take effect and commodity prices decline.”

Arguments
a. The government previously announced tax breaks for manufacturing industries worth
Rp 22.9 trillion (US$1.46 billion). Manufacturing workers with incomes below Rp
200 million per year would be exempted from paying income tax. Corporate income
tax for the manufacturing sector has also been cut by 30 percent and import tax
payments deferred.
b. Indonesia has set aside Rp 405.1 trillion from the 2020 state budget for medical needs,
the social safety net and relief for small and medium businesses as the pneumonia-like
illness has infected more than 5,000 people as of Friday afternoon, with 496 dead.
c. Indonesia will issue larger tax breaks to cover 11 business sectors similar to the
incentives given to manufacturing industries to help companies weather the economic
impacts of the COVID-19 pandemic.
Questions
a. In response to mitigate the economic impact of the coronavirus epidemic, the
government has already spent Rp 158 trillion worth of stimulus. Such an effort does
not seem to have a desirable effect on the economy as business owners are still
struggling. Will it lead to massive layoffs?
b. Statistics Indonesia revealed that about 70.49 million or 55.72 percent of Indonesian
citizens work in the informal sector[ CITATION Bad19 \l 1033 ]. Since they do not
receive any monthly salary, any change in the economy will make them vulnerable.
Up until now, the government still has not given proper attention to people working in
the informal sector. Factories and companies may increase their production level,
thanks to the government’s stimulus packages, but it will mean nothing if the people
in the market cannot buy them.
c.