The tax exemption is designed to alleviate the financial burden of MSMEs during the novel coronavirus disease 2019 (COVID-19) outbreak, he said during a limited meeting via video conference at the Merdeka Palace in Jakarta on Wednesday.
"The final income tax rate will be lowered from 0.5 percent to 0 percent for a period of six months, from April to September 2020," he said, while opening the meeting to discuss a follow-up to the program for mitigating the impact of COVD-19 on micro small and medium enterprises.
The tax assistance is one of the five schemes to help MSMEs withstand the business downturn caused by the COVID-19 pandemic.
In addition, MSMEs can also restructure credits, receive interest subsidies and relaxation of loan repayments.
The government plans to increase the amount of working capital credits for MSMEs, particularly those that had no access to financial or banking institutions.
The president also asked officials to ensure that those MSMEs categorized as being poor and vulnerable to the impact of the COVID-19 will be among social assistance recipients.
"The social assistance includes family hope program assistance, basic needs, cash social assistance, electricity tariff reductions and pre-employment cards," he said.
Related news: Indonesia's economy estimated to grow at 4.5-5.5 percent in 2021
Related news: President Jokowi warns of a possible global economic recession