United States of America Amerika (US) does not want to miss on preparing an economic stimulus. US Treasury Secretary Steven Mnuchin said to AFP that they are preparing a $1tn stimulus package. Half of the stimulus package will be cashed out, while the remaining $500bn will be distributed to SMEs.
The aviation industry is estimated to receive an injection of funds amounting to $50bn. The stimulus package does not include tax deferral, which will be provided by the US government in the amount of $300bn. This financial assistance far exceeds the package released during the 2008 global financial crisis.
So, what about Indonesia?
As of now, the Indonesian government has prepared a stimulus package phase III, which focuses on social safety nets. In other words, the stimulus package III will utilize social assistance channels such as Family Hope Program (PKH), Staple Food Cards, and Non-Cash Food Assistance (BPNT).
However, Finance Minister Sri Mulyani Indrawati said that the third round of stimulus measures will focus on the health sector. “The third stimulus will assess all needs so we can direct the funds there,” said Finance Minister Sri Mulyani Indrawati, Wednesday (18/3).
However, she said, she is still undecided on the quantum of funds that need to be allocated to finance the third round of the stimulus measures. She said, the Ministry of Finance is coordinating with the Health Ministry and the National Disaster Mitigation Agency (BNPB) to calculate the budgetary requirements in this phase.
Several factors are included in the assessment, among others, the number of regional hospitals that need assistance, funds to improve the hospital capacity, and procurement of protective equipment such as masks and hand sanitizer.
Before the third stimulus package, the government had also passed the second stimulus package to dampen the impact of Covid-19 outbreak against the national economy.
Quoting CNBCIndonesia.com, the government, through its Finance Ministry, issued a fiscal stimulus, in the form of relaxation of income tax article 21 (PPh21), which stipulates a provision of 100% PPh21 due being borne by the government (PPh DTP) for workers in the manufacturing sector with income of up to Rp200 million per annum. PPh DTP will be given for 6 months, starting from April until September 2020. The amount of value borne by the government is Rp8.6tn.
The next is the relaxation of import tax article 22 (PPh 22) for 19 certain sectors, KITE taxpayers, and SME Export Oriented (KITE) taxpayers. The tax exemption will be given for 6 months, starting from April until September 2020, with an estimated total exemption Rp8.15tn.
The third is the relaxation of income tax article 25 (PPh 25), in the form of reduction of income tax article 25 (PPh 25) by 30% to 19 certain sectors, KITE taxpayers, and SME Export Oriented (KITE) taxpayers for six months, starting from April until September 2020, with an estimated total of exemption of Rp4.2tn.
Lastly, the relaxation of value added tax (VAT) restitution, in the form of the acceleration of restitution to 19 certain sectors, KITE taxpayers, and SME Export Oriented (KITE) taxpayers for six months, starting from April until September 2020, with an estimated total value of restitution of Rp1.97tn. There is no limit on the value of VAT restitution for exporters, meanwhile for non-exporters the amount of VAT restitution is set at a maximum of Rp5bn.
In addition to fiscal stimulus, the government is also preparing a non-fiscal policy package. Quoting Hukumonline.com, the non-fiscal policy is in the form of simplification and reduction of the number of Prohibitions and Restrictions (Lartas) for export activities, with the aim of increasing export activities, sustainability and competitiveness.
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