JAKARTA - The government issued a policy to exempt the manufacturing industry sector from PPh 21 and small and medium industries (IKM) engaged in 19 certain sectors from import VAT, in order to anticipate the weakening economy caused by the COVID-19 outbreak. This was conveyed by President Joko Widodo in a press conference yesterday (31/3)
According to President Joko Widodo, the policy is made as a stimulus for MSMEs and businesses. "Exempting PPh 21 for workers in the manufacturing sector with a maximum annual income of Rp 200 million," he said.
In addition, to facilitate imports, the government exempts IKM engaged in 19 sectors from import VAT. To support exports, the government also reduced the PPh tariff by 25% for exporters. The government will also speed up VAT refunds for 19 certain sectors to maintain business liquidity. "And for the reduction of the Corporate Income Tax rate by 3%, from 25% to 22%. And for the postponement of principal and interest payments for all KUR debtors affected by COVID-19 for 6 months," he said.
In the non-fiscal sector, the government undertook several policies, namely simplification of limited restrictions on import and export, and the acceleration of export-import services through the national logistic ecosystem. (LK)