Jokowi Talks Lockdown, Red Cross Warns of Covid Catastrophe, Tax Changes Coming
Jun 30, 2021 | AmCham Indonesia
Jokowi Says Emergency Measures Needed
President Joko Widodo said emergency restrictions on community activities (PPKM) are needed because slowing the recent spike in Covid-19 cases is key to stabilizing the economy.
Specifics are yet to be officially released, but President Widodo said in his opening statement to the Indonesian Chamber of Commerce and Industry (Kadin) national conference today, June 30, that emergency PPKM could last for one or two weeks, and will specifically target Java and Bali, as there are 44 regencies/cities and six provinces placed on level 4 alert, based on the World Health Organization’s Covid-19 situational assessment scale. Other sources suggest emergency PPKM may be implemented from July 3-20.
It is significant that the president made the remarks at the Kadin convention because some local business associations have opposed a stricter lockdown due to fears of economic hardship.
“We are encouraged that a firmer lockdown is in the works,” said AmCham Indonesia Managing Director A Lin Neumann. “The economy cannot recover in our view until the spread of the virus is slowed.”
The Covid-19 surge in Indonesia is on the verge of a full-blown "catastrophe," according to the International Red Cross, as the aggressive Delta variant is causing a spike in cases and hospitals are unable to cope with the rapidly rising numbers.
"Every day we are seeing this Delta variant driving Indonesia closer to the edge of a COVID-19 catastrophe," said Jan Gelfand, head of the Indonesian delegation of the International Federation of Red Cross and Red Crescent Societies (IFRC).
New cases have been regularly topping 20,000 over the last few days, with several hospitals in red zones, including Jakarta, reporting over capacity. Some 93 percent of isolation beds in Jakarta were occupied as of Sunday, June 26.
The Ministry of Health reported 21,807 new cases as of 12:00 noon today, June 30, surpassing the previous record of 21,096 daily cases set on Sunday, June 27. This brings the total number of cases since the pandemic began to 2.178 million, with 239,368 active cases.
The surge in cases following the Idul Fitri holiday, combined with the Delta variant, is creating a humanitarian crisis in the country as the government plans a more vigorous lockdown strategy.
Meanwhile, the Covid-19 Task Force has updated the list of red zones to 60 due to the increasing number of Covid-19 positive cases. The list covers 14 provinces, with Central Java having the highest number at 22, followed by West Java with 11.
Antigen Test Vendors Battle on Price as Demand Grows
Reports show evidence of a price battle among antigen test vendors, from independent testing facilities to clinics and hospitals. Prices range from below Rp 100,000 to over Rp 300,000. The number of vendors offering antigen tests has spiked as customer demand is growing rapidly. Swab antigen tests are the primary choice of many because the results come much quicker than PCR tests but cover a less comprehensive time period. Many of those getting antigen tests do so because a contact has tested positive for Covid-19, or because their workplace requires them to get tested regularly.
Indonesian Minister of Finance Sri Mulyani Indrawati has proposed an overhaul of tax regulations, including a program to report undisclosed assets, introducing a carbon tax and increasing the VAT rate. The proposal aims to increase government revenue, which has fallen due to the pandemic. Under the proposal, the general VAT rate will increase from 10 percent to 12 percent. There will also be a different tariff scheme for specific categories of goods and services, with a range of 5 percent to 25 percent. More subsidies are proposed to reduce the impact of increased VAT on the poor.
Sri Mulyani also proposed a new carbon tax of Rp 75 per kg of CO2 and an excise tax on all plastics. Following the last tax amnesty from 2016 to 2017, she has also proposed a scheme for taxpayers to declare undisclosed assets by charging a rate between 12.5 percent and 30 percent of asset value, depending on when assets were acquired and how they are invested.
The proposal also includes an alternative minimum tax to allow loss-making businesses to operate, a chance to settle tax crimes with fines, and provisions to allow third parties to collect taxes on behalf of the government. The proposed tax bill is set to be debated by House of Representatives Commission 11, which handles financial issues.
Oxygen Prices Leap As Covid-19 Cases Surge in Jakarta
With the surge of Covid-19 cases in Jakarta, hospitals are filling up and many patients are being turned away. As a result, the price for a tank of oxygen has nearly tripled from $50 to $140 due to increasing demand from people seeking help for infected family members at home. Stocks in many areas in Jakarta have dried up. A Jakarta health agency official said the oxygen shortage at hospitals is temporary, mainly due to distribution issues, and is being resolved with help from the police, the parks agency and the Red Cross.
To further accelerate the distribution of the tanks, Jakarta Governor Anies Baswedan has deployed delivery vehicles from the city government. Minister of Industry Agus Gumiwang Kartasasmita said hospitals and health facilities will be the first priorities for the production and distribution of oxygen tanks.
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AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard is the Managing Editor