Indonesian Filament and Fiber Producers Association(APSyFI) and the Indonesian Textile Association (API) have requested the government to relax tax policies as COVID-19 may force around 70 per cent of textile and textile product (TPT) companies to shut shop. At the moment, 80 per cent textile companies have halted operations temporarily while facing cash flow issues, so financial support from the government is urgently required.

One request includes penalty fee waivers from state electricity firm PLN and state gas company PT PGN for textile companies with electricity and gas consumption below the minimum threshold. The association warned that massive business closures could cause a spike in unemployment, as around 1.8 million TPT industry workers are already furloughed or laid off because of the pandemic. According to the Industry Ministry’s latest estimate, TPT industry employs around 135,000 workers annually, making up 22.5 percent of the total 600,000 workers in the industrial sector.

The association also complained about the financial sector not providing credit relaxations to textile companies, even though the Financial Services Authority (OJK) has issued regulation No.11/2020 on credit restructuring for companies impacted by the pandemic. There could be a spike in nonperforming loans from the TPT industry if the situation continues.