Gov’t Allocates Rp123.46 Trillion to Support MSMEs amid COVID-19 Pandemic

Loan for MSMEs. Photo by: Ministry of Finance

The Government provides Rp123.46 trillion budget to support micro, small and medium enterprises (MSMEs) amid COVID-19 pandemic.

The budget includes Rp35.28 trillion interest subsidies, Rp78.78 trillion placement of the Government funds for restructuring, Rp5 trillion guarantee fees spending, Rp1 trillion guarantees for working capital, Rp2.4 trillion income tax borne by the Government, and Rp1 trillion investment financing to cooperatives.

The Government also provides tax exemption for MSMEs with annual gross revenue below Rp4.8 billion through Regulation of Finance Minister Number 86 of 2020.

Based on the latest data, there are 208,135 taxpayers (9% of 2.31 million taxpayers) whose applications for tax exemption have been approved.

“On this occasion, we urge MSMEs business owners to immediately submit an application to the Directorate General for Taxes via tax.go.id  to obtain the tax incentive,” the Finance Minister’s Expert Staff Nufransa Wira Sakti said on Monday (10/8).

The Government, he added, also provides productive social assistance with a budget of up to Rp30 trillion. The assistance is provided for 12 million MSMEs business and will be implemented by Ministry of Cooperatives and Small and Medium Enterprises.

“On the other hand, we also urge those who have a steady income and financial stability to buy MSMEs and domestic products. The supply side will not be optimum if the demand side does not increase. We hope that all parties can support each other to strengthen the Indonesian economy,” Nufransa said.

On that occasion, Nufransa also said that digital technology is very important to provide a new ecosystem of business, including raw material supply, packaging services, shipping services and payment services.

“I hope that the innovation and solutions provided by various digital platforms, including Gojek, can help MSMEs to adopt technology and transform their businesses consistently. In addition, the current situation reminds us of the importance of encouraging MSMEs owners in various sectors to enter formal sector, so that it is easy for policy makers to determine strategies and incentives accurately, precisely and quickly,” he said. (Kemenkeu/EN)

Translated by: Ridwan Ibadurrohman
Reviewed by: Mia Medyana