April 30, 2020 / 11:06 AM / 25 days ago

Indonesia gives tax breaks to small firms, incentives to keep jobs

JAKARTA, April 30 (Reuters) - Indonesia will not require small companies to pay income tax for six months and it will also subsidise insurance premiums for workers to help cushion the blow from the coronavirus pandemic, according to a senior minister and a government statement.

The government has already announced tax breaks for a wide range of sectors as part of a $25 billion package, while the central bank has cut interest rates twice this year in response to the COVID-19 outbreak and its economic impact.

The new measures include six-month relief for micro, small and medium enterprises from income tax payments, the tax office said in a statement.

Separately, Airlangga Hartarto, coordinating minister for economic affairs, said the government would provide a 90% discount for three months on premiums for workers’ protection insurance, normally paid to state insurer BPJS Ketenagakerjaan, without reduced benefits.

Hartarto told reporters the measure would apply to over 116,000 companies that had requested help in their payments to BPJS Ketenagakerjaan in Southeast Asia’s biggest economy.

“We’re giving out so much stimulus, but with the understanding that industries should not fire workers. Therefore we hope all of our stimulus incentives can be a cushion to protect workers,” Hartarto said.

The manpower ministry has confirmed that 1.7 million people who lost their jobs due to the pandemic will be enrolled in the government’s new skills training programme, Hartarto said.

President Joko Widodo has also ordered cash transfers and help in the form of seeds, fertilizers and pesticide for 2.7 million poor farmers, Hartarto said, adding that his team was currently assessing the feasibility of the plan.

Indonesia had reported 10,118 coronavirus cases as of Thursday, with 792 deaths. ($1 = 14,825.0000 rupiah) (Reporting by Maikel Jefriando and Tabita Diela Editing by Gareth Jones)

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