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Labor-intensive incentives provide two benefits

Reporter: Agus Triyono | Editor: Hendra Gunawan

JAKARTA. The Minister of Manpower, Hanif Dakiri believes that the incentives for labor-intensive industries issued through the Economic Policy Package VII, will have a big impact on the labor sector. At least, there are two direct benefits that can be obtained by the labor sector from this policy.

First, for people who are currently working. Hanif is sure that the incentives provided by the government can ease the burden on the industry so that they can still work. Second, for those who have not worked, the policy can provide employment for them.

“If the industry grows, it means that it can continue to absorb workers, right?” He said at the State Palace Complex, Friday (4/12).

The government through the VII Economic Policy Package has reduced the PPh Article 21 rates by up to 50% for employees that have been paid by the company. Darmin Nasution, the Coordinating Minister for the Economy, said that Article 21 Income Tax relief is not for all employees.

This is only given to workers working in labor-intensive industries that employ a minimum workforce of 5000. Apart from that, the labor-intensive industries must also be export-oriented.

“Production results must be at least 50% based on the previous year’s production data,” Darmin said.

In addition to these conditions, said Darmin, companies that want their employees to get PPH Article 21 relief must also submit a list of names of employees who will be given the facility. In addition, employees who are eligible for PPh Article 21 relief are employees whose income is below Rp 5 million per month.

Darmin said that this relief would take effect on January 1. This relief is given within two years and can be extended again, if based on the government’s evaluation, the industry still needs the incentive.

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