Indonesia has increased tax incentives for businesses in a move to try to limit the economic impact of the coronavirus pandemic. Previously announced tax relief due to expire in September, have been extended until the end of the year. They include tax breaks for some manufacturing workers and small and medium-sized enterprises, and a discount on corporate tax installments.

The government has also expanded the type of companies eligible to apply for the tax breaks, including, for example, forestry businesses in the scheme. To fight the epidemic, the Indonesian government has allocated nearly US$50 billion for economic relief. Finance Minister Sri Mulyani Indrawati has previously said the tax breaks were meant to prevent “massive bankruptcies.”

Bank Indonesia (BI) has cut its benchmark interest rate for the fourth time this year to bolster the recovery from the coronavirus pandemic, which has dealt a crushing blow to the country’s economy. The central bank slashed its benchmark interest rate, the BI seven-day reverse repo rate, by 25 basis points (bps) to 4%, the lowest since 2016 last week.