Jakarta. The Indonesian government is designing various incentives and stimulus measures to support the industrial sector in dealing with the impact of a 6.5 percent increase in the provincial minimum wage (UMP), Industry Minister Agus Gumiwang Kartasasmita said on Wednesday.

He said discussions are underway to design fiscal support for certain sectors, such as the automotive industry.

“We are discussing various forms of support, incentives, or stimulus that the government will prepare to assist businesses and the industrial sector in facing the impact of the UMP increase,” Agus said.

One of the incentives that has been discussed is the relaxation of the luxury goods tax and the value-added tax borne by the government, which will not only apply to electric vehicles but also to hybrid vehicles.

“We are not only focusing on electric vehicles but also striving to provide incentives for other types of vehicles, including hybrids. This has already been discussed,” explained Agus.

The increase in the minimum wage is considered necessary to improve public purchasing power. The government is also working on preparing stimulus measures to mitigate the impact on industries due to this policy. This stimulus is expected to boost domestic consumption and support economic growth.

“The provincial minimum wage increase is a strategic step to maintain strong public purchasing power,” he added.

According to the Secretary General of the Industry Ministry, Eko Cahyanto, the industrial sector is ready to comply with the minimum wage increase policy and hopes that this policy will create an ecosystem that supports national competitiveness so that Indonesian industries can compete globally.

“We hope that the government’s policy can create an ecosystem that supports growth and the competitiveness of industries at the global level,” he concluded.

This provision of stimulus shows the government’s commitment to ensuring worker welfare while ensuring the sustainability of the business world.

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