Jakarta | Senior economist Emil Salim stated that tax incentives such as a "tax holiday" should not only be granted to large investors but also to small and medium enterprises (SMEs).
"When talking about a 'tax holiday,' why shouldn’t it be given to SME entrepreneurs, when they are also affected by turmoil and crises," he said during the national seminar "The Economy Through the Ages" in Jakarta, Monday (31/8).
Emil hopes that the government will pay attention to the real sector and SMEs, which have proven to be more resilient compared to the financial sector, and help Indonesia's economy navigate through crises.
"'Tax holiday' policies still focus on the upper-level investors and not those at the lower levels. Such financial incentives should not only be provided for large projects," he added.
Previously, the government issued Minister of Finance Regulation (PMK) No. 159/PMK.010/2015 concerning the provision of exemptions or reductions in corporate income tax as an incentive for the development of pioneer industries.
This regulation is a revision of PMK No. 130/PMK.011/2011 and PMK No. 192/PMK.011/2014, with one of the key points being the addition of pioneer industries in the manufacturing sector eligible for the "tax holiday" incentive.
Regarding development, the former Minister of Transportation during the New Order era also emphasized the importance of equitable development across various regions of Indonesia, including rural areas where transportation access remains inadequate.
"There is still no comprehensive development strategy for a unitary state stretching from Sabang to Merauke, especially in terms of infrastructure, education, and food. The macro picture shows that development remains concentrated in Java, Sumatra, and Bali," he explained.
Emil also criticized the current infrastructure development plans, claiming they are driven by political lobbying rather than fundamental needs to unify inter-regional connectivity.
"Nowadays, project creation no longer relies on bureaucracy but on political interest. For example, the high-speed rail project, which was not listed in the financial notes or Bappenas’ plans. Where is the logic in that?" questioned one of Indonesia's leading economists.
Source: REPUBLIKA.CO.ID