Budget’s Heavy Burden to Recover Economy

Indonesia's COVID-19 cases have soared since early June 2021, surpassing the worrisome mark of 2 million infections. Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira said the funds' allocation for the health sector in the National Economic Recovery Program (PEN) budget in 2021 was insufficient to cope with the surge in COVID-19 cases, as the submission of claims for COVID-19 patients treatment would soar.

According to Bhima, the budget for the health sector and social protection had increased. Overall, he assessed that the 2021 PEN Program budget should increase to Rp 1,000 trillion-1,200 trillion from the current Rp 699.43 trillion. The additional budget would anticipate a stricter social restrictions scenario as well. The government has sufficient capacity to increase the funding for the PEN Program.

Bhima assessed that the government could reallocate the budget that has previously been used to sell out tax incentives to businesses. For this reason, the government is advised to examine in more detail which incentives are urgent to be given and which are not. "Since it erodes tax revenues, tax discounts must be stopped. Evaluate [everything] that's not on target," he said on Tuesday (6/22).