Encouraging Labor-intensive Industry Performance and the Spirit of UMKM

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The following is important information related to the development of the business universe that needs attention today based on the curation of the SUAR Team.

Labor-Intensive Industries Need More Than Just Government Incentives

Labor-intensive industries play a role in expanding employment, in addition to contributing to national production capacity and strengthening economic resilience. Eddy Widjanarko, Chairman of the Indonesian Footwear Association (Aprisindo), stated that he can understand the government's limitations to maximally assist labor-intensive industries. Efforts that the government has made, such as the Labor Intensive Industry Credit (KIPK) scheme, should also be appreciated - although the realization is still far from the set ceiling.
In line with Eddy, Chairman of the Indonesian Furniture and Handicraft Industry Association (HIMKI) Abdul Sobur stated that labor-intensive industries need more certainty and ease of market access than fiscal incentives or cheap credit. Sobur said, there are three things that are very urgent to pay attention to and need to be handled by the government immediately. First, ease of export and market access. Second, certification and proportional regulations. Third, access to financing according to the character of the industry with easier requirements.

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Horeca Employee Tax Exemption Facility Appropriate When Industry Is Stagnant

The government has officially launched the 2025 economic stimulus package. One of the contents is a government-borne Income Tax Article 21 facility for the tourism sector, especially hotels, restaurants and cafes (horeka). The policy will benefit workers in the horeka sector, whose number is estimated to reach 552,000 workers.
So far, Income Tax 21 DTP incentives have only been given to workers in labor-intensive industries in accordance with Minister of Finance Regulation (PMK) Number 10 of 2025. The policy applies to the January to December 2025 tax period. The provisions for incentive recipients still refer to the applicable regulations. Namely, permanent employees with a maximum gross monthly income of IDR 10 million and non-permanent employees with an average daily income of a maximum of IDR 500,000.

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Extension of Final Income Tax 0.5% Granted, UMKM Can Save

Earlier this week, President Prabowo Subianto and his staff discussed a number of measures to support the real sector, especially micro, small and medium enterprisesUMKM). In the limited meeting, a number of policies were agreed upon, including the continuation of fiscal incentives, support for labor-intensive industries, as well as strengthening the tourism sector and labor protection programs. One of the important points discussed was the final income tax (PPh) for UMKM players.
The Coordinating Minister for Economic Affairs, Airlangga Hartarto, said that the government has extended the final income tax rate of 0.5% for UMKM with a turnover of up to IDR 4.8 billion per year. This policy is no longer extended on an annual basis, but is given certainty until 2029.

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Besides Facilitating UMKM Financing Access, Also Encourage Market Demand

The Financial Services Authority (OJK) has just issued OJK Regulation Number 19 of 2025 concerning Ease of Access to Financing for Micro, Small and Medium Enterprises, Monday (15/9/2025). The regulation aims to encourage banks and non-bank financial institutions (LKNB) to provide access to UMKM lending more easily, quickly, cheaply, and inclusively while still prioritizing prudential principles. Through this regulation, OJK hopes that banks and NBFIs can be more innovative in offering financial products according to the characteristics and business needs of UMKM.
There are seven kinds of convenience that OJK encourages in this regulation. First, simplification of requirements and ease of UMKM eligibility assessment. Second, special financing schemes according to business characteristics, including the acceptance of collateral in the form of intellectual property. Third, the use of alternative credit ratings to speed up the business process. Fourth, setting reasonable financing costs for UMKM. Fifth, utilization of information technology to strengthen the digital ecosystem, financial literacy, and consumer protection of UMKM. Sixth, affirmation of bad debt write-off provisions in UMKM financing. Seventh, incentives for banks and NBFIs that actively provide easy access to financing.

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Europe recognizes Malaysia's MSPO certificate, a challenge for Indonesia

The competition between Indonesia and Malaysia as the world's king of palm oil producers is getting tighter after Malaysia received MSPO recognition from the European Union for its palm oil products. Malaysia will find it easier to expand into the European market. This is a challenge for Indonesia, which has a larger palm oil production.
Indonesia still controls more than 50% of total global production or around 46 million metric tons (MT). Meanwhile, Malaysia is around 20% or around 19 million MT. However, behind these high production figures, the issue of legitimacy and sustainability certification is a critical issue - especially in the European market.

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Oil & Gas Indonesia Exhibition: The largest petroleum equipment exhibition in Indonesia, focusing on oil and gas exploration, production and refining is organized by PT Pamerindo Indonesia, which is part of Informa Markets. The event will be held on September 17-20, 2025 at the Jakarta International Expo (JIExpo), Kemayoran, Jakarta. The target audience is trade players, including exhibitors and visitors, from various countries. Participants can participate as visitors by pre-registering or as exhibitors by booking a booth. More information can be accessed through the event's official website.

International Livestock, Diary, Meat Processing and Aquaculture exposition (ILDEX) 2025: This international exhibition focusing on the livestock, fishery, meat processing and aquaculture industries will be organized by VNU Exhibitions Asia Pacific Co Ltd, on September 17-19, 2025 at the Indonesia Convention Exhibition (ICE) BSD. The exhibition will bring together international experts in the fields of breeding, animal health, animal feed and automated processing, as well as providing conference programs and networking opportunities. Exhibitors and visitors can register to attend the event, which is an important platform for collaboration and business development in related sectors.