“Debt is our tool. I convey to my HIPMI (Indonesian young entrepreneurs'
association) friends, healthy entrepreneurs must have debt, as debt allows them to expand and so also the government," Nazara remarked at HIPMI's Indonesia Economic Outlook 2022 event broadcast online, Tuesday.
Indonesia's credit growth in 2021 was recorded at around 5.2 percent, but prior to the COVID-19 pandemic, the credit growth far exceeded the figure.
"We want a double-digit growth, so that the business circle has sources to finance expansions," he affirmed.
Credit allows them to have a source of funding that will ultimately encourage economic recovery, according to the deputy minister.
The government will continue to support entrepreneurs through various policies, such as tax relaxation and accelerated VAT refunds.
The government has increased the limit for accelerated VAT refunds to Rp5 billion, from the earlier Rp1 billion.
The latest policy enables taxpayers to obtain refunds without the need for detailed examinations.
"The prerequisite is that all documents must be stored, so when they are later checked, the documents are safe. Hence, it is Rp60 billion per year, and we offer a lot of relaxation," Nazara stated.
Moreover, debt is also a last resort for the government to maintain government spending, which is the driving force of the national economy.
Related news: Increase in Indonesia's debt ratio relatively small: BKF
The state deficit reached 6.15 percent of the GDP, so the shortfall has to be financed from the debt, he noted.
He explained that the debt is obtained in collaboration with Bank Indonesia (BI) in purchasing Government Securities (SUN), and the debt comprises those with and without interest.
"Hence, it should be careful in deciding to obtain debt," he stated. As of late September 2021, the Indonesian government's debt had reached Rp6,711.52 trillion (over US$467.5 billion), according to media reports quoting the Finance Ministry's publication in October 2021.
Related news: Government calls for meticulous management of debt in 2022 RAPBN
Translator: Kuntum KR, Fardah
Editor: Rahmad Nasution
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