Government Plans Tax Relief for Medical Devices

JAKARTA. The government is preparing tax facilities in the form of relaxation for the health industry. The aim is to make the medical device price in the country more affordable.

Quoting Bisnis.com, the plan was discussed at the internal government meeting chaired by President Joko Widodo and attended by Minister of Health Budi Gunadi Sadikin, on Tuesday (2/7).

According to him, the tax relaxation is expected to improve the cash flow of pharmaceutical companies. With a good cash flow, ideally, the company will have a reduced financial burden.

The calculation is as follows. If the company's cash flow is delayed between 3-6 months, the impact is that the company's interest expense will be in the range between 5%-8%. 

The implication is that the State will spend more money than it receives. However, the discussion also explores other aspects beyond incentives.

Some of them include the governance of buying and selling transactions, to factors that create other inefficiencies, such as costs incurred. Budi also said that when the medical device industry is inefficient, the government must eventually intervene.

Meanwhile, citing cnbcindonesia.com, the government previously revealed that medicines in Indonesia are five times more expensive than those abroad. Therefore, the government hopes that the prices of medicines and medical devices in Indonesia can be equal.

To implement this policy, the government, which includes the Ministry of Finance, Ministry of Trade, and Ministry of Health, continues to coordinate. (ASP/KEN)