Apindo Calls For Tax Incentives To Revive Indonesia’s Textile Industry
The Indonesian Employers’ Association (Apindo) has appealed to the government to reinstate the tax incentive for Income Tax Article 21 (PPh 21) borne by the government (DTP) to aid labour-intensive sectors, especially the struggling textile industry. This call comes in the light of the recent bankruptcy of PT Sri Rejeki Isman Tbk. (Sritex), a major player in the sector.
Anne Patricia Sutanto, Chair of Apindo’s Trade Division, expressed concerns over the contraction of the industry and emphasized the need for immediate government action. She proposed increasing the Non-Taxable Income (PTKP) threshold or reintroducing the PPh 21 tax relief that was previously implemented during the Covid-19 pandemic. “The industry is facing significant challenges,” she noted during a meeting at the Coordinating Ministry for Economic Affairs in Jakarta on October 30, 2024.
Apindo has formally submitted this proposal to Finance Minister Sri Mulyani Indrawati and Coordinating Minister for Economic Affairs Airlangga Hartarto. The association believes that reinstating the tax incentive would bolster consumer purchasing power, particularly for workers in the affected industries.
The PPh 21 DTP incentive was initially established under Finance Ministerial Regulation (PMK) Number 9/PMK.03/2021, which provided tax relief to employees in specific sectors during the pandemic. By reintroducing similar measures, Apindo argues that the government can help stabilize the textile sector and support its recovery.
