JAKARTA (Reuters) – Indonesia has increased tax incentives for businesses in a move to try and limit the economic impact of the coronavirus pandemic, its tax office said on Saturday.
The tax exemptions announced in the past, which were due to expire in September, have been extended until the end of the year, according to a statement. They come with tax exemptions for part of production staff and small and medium-sized enterprises, as well as relief on corporate tax quotas.
The government has also expanded the number of corporations eligible to apply for tax exemptions, including, for example, forest corporations under the regime.
It has allocated approximately $50 billion in public spending to combat the coronavirus pandemic. This, and an expected decline in tax revenues, is expected to increase its 2020 budget deficit by more than 3 times the government’s original plan, to 6.34% of gross domestic product.
Finance Minister Sri Mulyani Indrawati said in the past that tax exemptions are intended to prevent “mass failures.”
The government’s forecast for the economy, the largest in Southeast Asia, ranges from a contraction of 0.4% to an expansion of 1%. It went up 5% last year.
On Saturday, Indonesia surpassed China, as the country peaked showed cases of coronavirus in East Asia, with 84882 infections and 4016 deaths.
Reporting through Tabita Diela; Edited through Gayatri Suroyo and Clelia Oziel
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