MSMEs Receive Strong Support from Government

   

The Micro, small, and medium enterprises (MSMEs) sector has been one of the hardest-hit sectors during the Covid-19 pandemic despite being an important pillar for Indonesia’s economy. The sector contributes 61.07% or IDR8.573,89 trillion to the total GDP and absorbs 97% of the total workforce, collecting up to 60.42% of the total investment for Indonesia. To help MSMEs recover, the government arranges an easy business registration process, relaxation on taxes, and involving MSMEs in investments.

The Ministry of Investment/BKPM as the administrator of the country’s business licensing, has provided a simple business registration system called the Online Single Submission (OSS). This online platform is integrated with other ministries and non-governmental agencies, such as the Directorate General of Taxes, General Legal Administration, and Population Administration, making arrangements for all required business licenses and registrations simpler for business owners.

Businesses are also exempted from paying import duties for goods. Imported goods that meet the requirements for this exemption are goods shipped from abroad; goods that have been processed by the Bonded Logistics Center (PLB); or goods that come out of bonded zones or warehouses, special economic zones, free trade zones, and companies that have KITE (Ease of Import for Export Destination) facilities. For the import of medical goods, the VAT and sales tax on luxury goods (PPnBM) will not be imposed, while import taxes of goods related to the mitigation efforts of the COVID-19 pandemic are fully exempted.

Involving MSMEs in Big Investments

As many as 56 large foreign and domestic companies have signed partnership commitments with 196 selected local MSMEs with a potential contract value of IDR1.5 trillion. They will be working in tandem to escalate multiplier investment effects in Indonesia by improving MSME’s product quality and opening more opportunities to expand markets and gain new customers.

“Investment collaboration is conducted with local businessmen or MSMEs in the regions outside Jakarta. BKPM will facilitate and select MSMEs with good qualities that meet criteria and requirements.” said The Minister of Investment/Chairman of BKPM Bahlil Lahadalia, citing the President’s instruction to collaborate every incoming investment with local businessmen or local MSMEs to create job opportunities for locals.

The Minister of Cooperatives and SMEs Teten Masduki stated that the ministry is opening new access to capital, including from cooperation with investors, to help MSMEs survive the COVID-19 pandemic. “Let’s formulate the concepts and business plans for MSMEs together,” said Masduki to BKPM.

The data from BKPM’s KOPI Center (Operational Command Center and Investment Escort) shows that 60% of the total NIB (Business Registration Number) issued by OSS throughout 2020 are MSMEs. Stimulating growth in MSMEs is hoped to boost Indonesia’s post-pandemic economic recovery in the coming year.