Micro, small and medium enterprises (MSMEs) can now obtain tax identification numbers (NPWP) through state-owned banks, as the Taxation Directorate General seeks to simplify procedures to boost the government’s disbursement of COVID-19 aid.
Tax Office chief Suryo Utomo said that some MSMEs did not yet possess NPWPs, which, before the change in policy, would have made them ineligible to receive funds from the government during the pandemic. He said the new policy would support the nation’s economic recovery by allowing more MSMEs to receive stimulus funds.
“We are helping MSMEs obtain NPWPs through banks so that they can receive loans or government subsidies,” Suryo said during the launch of the program on Thursday. “This is a one-stop service in which banks can evaluate the eligibility of borrowers.”
Indonesia’s more than 60 million MSMEs, which account for 60 percent of the gross domestic product (GDP) of Southeast Asia’s largest economy, are struggling to stay afloat as COVID-19 restrictions severely affect their income. Their operations have either been closed or limited, and many workers have been laid off or furloughed.
The government has allocated Rp 123.46 trillion (US$8.44 billion) to assist small businesses and cooperatives out of the total Rp 695.2 trillion COVID-19 stimulus package. The funds cover loan interest subsidies and credit guarantees.
The government has also placed Rp 30 trillion in state-owned banks with the expectation that they will provide more loans to businesses.
State-owned banks under Himbara, including Bank Rakyat Indonesia (BRI), Bank Mandiri, Bank Negara Indonesia and BTPN, are now be able to provide online and offline services to allow MSMEs to obtain NPWPs.
The government has promised to provide of total of Rp 100 trillion in working capital loans to MSMEs. It has paid out Rp 5 trillion in credit insurance premiums to state-owned insurers PT Jaminan Kredit Indonesia (Jamkrindo) and PT Asuransi Kredit Indonesia (Askrindo) to provide guarantees for banks that channel loans to MSMEs until November 2021.
The program will cover loans with a ceiling of Rp 10 billion and a tenor of three years, with loans available for 60.6 million healthy MSMEs from all business sectors.
The loan guarantee program is intended to encourage banks to disburse more loans during the pandemic, Finance Minister Sri Mulyani said on July 7.
The loan disbursement rate among Indonesian banks grew 3.04 percent year-on-year (yoy) in May, much slower than the 5.73 percent growth in April as the coronavirus battered the real sector.
“Guaranteeing loans can help us break the risk-averse attitude of MSMEs and banks, which would allow us to boost our economic growth,” Sri Mulyani said.
The government is also working on a plan to provide cash transfers directly to MSMEs that have yet to receive financing access from banks to help them survive the pandemic.
The Tax Office is hoping to bolster revenue in the second half of the year after recording Rp 531.7 trillion in revenue in the first semester this year, down 12 percent from the same period last year and 44 percent below this year’s tax revenue target.