Google

ASEANAFFAIRS
Sign up | Log in

    ASEAN PROFILES

  ASEAN KEY DESTINATIONS

Home  >>   Daily News  >>   Indonesia News  >> Economy  >> Jakarta mulls ways to spur on spending
NEWS UPDATES Asean Affairs   14 August 2013  

Jakarta mulls ways to spur on spending

THE Indonesian government is mulling several fiscal incentive options to maintain domestic consumption.

According to Finance Minister Chatib Basri, his ministry is currently considering the possibility of introducing fiscal incentives.

We are exploring all options so that consumption or the keep buying strategy can continue, he said at an Aidil Fitri gathering in Jakarta recently an Aidil Fitri gathering.

One of the incentives being considered is to implement tax postponement on labour-intensive industries on the condition that companies will not lay off employees.

We implemented the same policy back in 2008. Workers will still have purchasing power because they are able to keep their jobs, therefore, domestic demand is sustained, he said, adding that another option would be introducing a tax discount.

The government would opt to implement a fiscal incentive because it is now less likely to rely on foreign direct investment (FDI) to spur economic growth, as FDI growth has continued to slow, according to Chatib.

Exports facing issues due to fluctuations in commodity prices are also unreliable for maintaining growth, he added.

Based on the latest data from the Investment Coordinating Board (BKPM), even though FDI remained the biggest contributor to the countrys realised investment figure in the second quarter of 2013, FDI only grew by 18.9 per cent year-on-year to reach US$7.2 billion, which made it the lowest growth since 2010.

Chatib said, however, that the government might not implement any option at all should consumption remain high after the Aidil Fitri holidays. "As many as 110 trillion rupiah (US$10.69 billion) was spent on consumption during Aidil Fitri. That will surely boost consumption growth. The most important thing is to keep the fiscal incentive options on standby," he said.

Separately, Industry Minister MS Hidayat said that under the considered tax postponement incentive scheme, labour-intensive industrial sectors particularly textile, garment and footwear would be exempted from the obligation to pay income tax for its workers, which would later be paid off by the government.

"It is one way that we can act to help firms avert layoffs at a time of economic hardship like now. If we do not act, the situation will be detrimental to our economy and add social costs associated with layoffs," he said.

The planned fiscal incentive is also part of the governments efforts to design a new reference for tripartite negotiations in setting a nationwide minimum wage increase each year, aiming to prevent a rise to a level that cannot be shouldered by the labour-intensive industry, which employs more than three million workers.

For the past few years, talks to set annual minimum wage increases have been contentious battles between labour unions, employer associations and local administrations in Southeast Asias biggest economy, with worker unrest escalating during periods of talks.

The fight over wage increase found its dramatic moment late last year when some local administrations finally approved significant hikes beyond the levels agreed on by the National Wage Council.The Jakarta Post/ANN

Jakarta Governor Joko Jokowi Widodo, for instance, instructed firms to push up the provincial minimum wage by 44 per cent to 2.2 million rupiah per month.

Despite the governments gradual strategy in raising wages, many labour-intensive firms both local and foreign decided to terminate employment.



Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates
Contact: marketing@aseanaffairs.com

Comment on this Article. Send them to  your.views@aseanaffairs.com

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
 
or
submit your comment in the box below



 
Today's  Stories    14  August 2013 Subsribe Now !
• Seletar Airport raising service and safety standards of ground handlers Subcribe: Asean Affairs Global Magazine
• Thai bourse welcomes MK Restaurant Group pcl. (M) Asean Affairs Premium
• Five companies in the pipeline for IPOs: OJK
Research Reports
on Thailand 2007-2008

•Textiles and Garments Industry

•Coffee industry

•Leather and footwear industry

•Shrimp industry

• Vietnam's economy back on track, says IMFs
• Jakarta mulls ways to spur on spending
• Foreign Firms in Laos Cheat, Bribe to Bring Fuel
• SGX-listed Yoma's consortium succeeds in tender for management of Myanmar's Mandalay Airport
Asean Analysis           14 August 2013 Advertise Your Brand
• Asean Analysis- August 14, 2013: Asia Pacific consumers are most worried about the economy: GfK
• Asean Weekly:The Biweekly Update 9 August 2013
Asean Stock Watch     13 August  2013
• Asean Stock Watch-August 13, 2013 

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan

ASEAN  ANALYSIS

This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

 


Name

Name


Email

Email



1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand
asean@aseanaffairs.com