The threat of a global recession is increasingly real and haunts various countries. A number of institutions predict the global economy will enter the brink of recession next year. This is due to the impact of rising interest rates which has the potential to continue so that it will hit various economic sectors. In the midst of the threat of a recession next year, the government through the Ministry of Finance (Kemenkeu) will still provide tax incentives next year. In the 2023 State Revenue and Expenditure Budget (APBN) the prepared budget is Rp 41.5 trillion. Unfortunately, the Ministry of Finance has not specified which sectors will receive tax incentives next year.

Executive Director of the Center of Economics and Law Studies (Celios) Bhima Yudhistira said that tax incentives needed to be adjusted but still took into account the multiple impacts created on employment opportunities and the recovery of certain sectors, as well as paying attention to the tax ratio. 

"Ideally, many tax incentives that were previously given to business entities begin to shift to direct incentives to consumers," said Bhima to Monday (17/10).

For this reason, according to him, the government could provide additional tax incentives in the form of relaxation of the value added tax (VAT) rate from 11% to 8%, so that household consumption can be maintained amid the threat of recession and weakening purchasing power.

Bhima suggested the government to continue to provide tax incentives next year to the property, retail and textile sectors.

However, regardless of the number of incentives provided, Bhima emphasized that the main point lies in monitoring the incentives so that they are right on target, and the ease of obtaining tax incentives without complicated procedures.

"Property (needs to be given) because of the multiplier effect to 175 sub-sectors, then retail through a reduction in VAT rates, the apparel textile sector will still be depressed, so it needs tax relaxation support," he said.

Meanwhile, Executive Director of the Institute for Development of Economics and Finance (Indef) Tauhid Ahmad said, next year the tourism and construction sectors need to be given tax incentives considering that they will be very deeply affected if Indonesia experiences a recession next year.

"I think it's the most dominant if you want to give it, because they are the worst in next year. So the incentive can make them less burdened and get benefits," said Tauhid, Monday (17/10).

However, Tauhid believes that the 2023 tax incentives of Rp 41.5 trillion are still not enough to withstand the impact of the recession next year. For this reason, additional additions are needed so that the sector can continue to grow positively amid the threat of a recession next year.

"Priority, yes, for the lower middle class should be given, because they are affected this year and next year," he added.