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Spokesperson for the Industry Ministry, Febri Hendri Antoni Arif. (ANTARA/HO-Biro Humas Kementerian Perindustrian) - 

The Industry Ministry is expecting the policy fixing the gas price at US$6 per metric million British thermal units (MMBTU) for the industrial sector to boost tax receipts and investment.

The seven industrial sectors that have been granted the gas price adjustment facility at US$6 per mmbtu will support the manufacturing industry’s contribution to tax receipts, spokesperson for the Industry Ministry, Febri Hendri Antoni Arif, said in a written statement issued on Saturday.

The manufacturing industry contributes significantly to the economy through tax receipts, among other things, he added.

In May, 2021, the manufacturing industry’s contribution to tax receipts grew 42.24 percent compared to 10.17 percent in April, 2021. On a yearly basis, the manufacturing industry’s contribution to tax receipts also swelled by 5.31 percent in the year ended May 31, 2021.

The seven industrial sectors that have been extended the gas price adjustment facility produce fertilizers, oleo chemicals, ceramics, petrochemicals, steel, glass, and rubber gloves, Arif said. The seven industrial sectors comprise 176 industries, he informed.

Tax receipts from the seven industrial sectors have shown an increase every year, he added.

For instance, corporate income tax receipts, filed under Article 21 (PPh 21) of the income tax law, from the industrial sector rose to Rp3.3 trillion in 2019 and further climbed to Rp3.4 trillion in 2020.

“This also shows a multiplier effect that industries receiving certain gas price adjustment facilities were aggregately able to maintain the number of employees during the COVID-19 pandemic and reduce the number of laid-off workers,” he said.

Income tax under Article 22 on the export of commodities from the seven industrial sectors also increased, suggesting that the exports and competitiveness of the industries receiving the gas price adjustment facility also strengthened, he noted.

Meanwhile, income tax under Article 22 on imports dropped due, in part, to a decline in the import of raw materials for industries, Arif said. Many industries have been using local raw materials as substitutes for imported raw materials, he added//ANT