- The Coordinating Minister for Economic Affairs, Airlangga Hartarto (“Coordinating Minister”), has affirmed that the government is currently preparing a number of incentives for labor-intensive industries aimed at reducing employment terminations amid an ongoing decline in the public’s purchasing power. The new incentive policy will be rolled out over the coming month, while the Coordinating Minister has stated that the aforementioned labor-intensive industries that will be entitled to enjoy the new incentives include companies that employ more than 200 workers and that operate within various economic sectors (e.g. textiles, toys, food and beverages and so forth).
- According to the Coordinating Minister, the new incentives include investment credit incentives for businesses operating within labor-intensive industries so that they can purchase machinery or tools aimed at ensuring greater efficiency and increased production output. Nevertheless, the Coordinating Minister has clarified that the incentives only represent a medium-term solution. In the short term, various government programs aimed at improving the general public’s purchasing power are being considered.
- The Coordinating Minister has also affirmed that the government has extended the applicability of various fiscal incentives, including taxes that will be borne by the government (e.g. value-added taxes and luxury goods sales tax for motorized vehicles) and an additional new quota for the housing financing liquidity facility. Furthermore, the government is also currently working on improvements to the following programs: 1) Unemployment insurance; 2) Occupational accident insurance; and 3) Community business credit.
- In addition to the above-described forthcoming incentives and programs, the Coordinating Minister has also affirmed that the government is set to offer write-offs for non-performing loans for farmers and fishermen, as well as for micro-, small- and medium-scale enterprises. This policy is officially outlined under the new framework of Regulation of the Government No. 47 of 2024. (ANT)
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