Apindo calls for fiscal consolidation for boosting purchasing power

Apindo calls for fiscal consolidation for boosting purchasing power

A screenshot of chairman of the Association of Indonesian Entrepreneurs (Apindo), Hariyadi Sukamdani, addressing an online press conference in Jakarta on Wednesday (July 21, 2021). (ANTARA/Sanya Dinda/KT)

Jakarta (ANTARA) - Chairman of the Association of Indonesian Entrepreneurs (Apindo) Hariyadi Sukamdani has asked the government to implement fiscal consolidation through social security programs and incentives for businesses to increase people's purchasing power.

Such a policy can ease the burden on society, if the emergency public activity restrictions (PPKM) are extended beyond July 26, 2021, he said. So far, business players have not felt the benefits of the tax relief offered by the central and local governments, he said.

"Tax relief from the government is for income tax payment for taxpayers (PPH 25) and for workers (PPH 21). The incentives utilization has been taken by many, but it has not been that useful for affected industries," Sukamdani said at an online press conference in Jakarta on Wednesday (July 21, 2021).

Companies still need to file taxes under PPH 25 despite incurring losses, he pointed out. The reason is that income tax payment (PPH 25) is collected monthly, while profits and losses of  businesses are reported at the end of the year, he explained.

The increase in non-taxable income (PTKP) to Rp200 million under PPH 21 in 2020 did not help many entrepreneurs, Sukamdani observed.

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The reason was that employees' income in companies affected by COVID-19 was not up to Rp200 million, he said.

"The companies that benefited from the tax relief were the unaffected ones," he added.

Meanwhile, in relation to taxes collected by local governments, he said that each local government applies a different taxation policy. But, in general, only a few local governments are offering tax reliefs to employers, he added.

"Local taxation varies. Some give discounts on Land and Buildings Transaction Tax (LBTT). Like in Jakarta, the government gives a 20-percent discount, but only at the end of the year. The relief is not maximal because some companies have paid before due," Sukamdani remarked.

Earlier on Tuesday, President Joko Widodo said he had decided to extend the PPKM until July 25, 2021. If the trend of cases continued to decline then, the government would gradually lift the restrictions, he added.  

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