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In addition, industries such as manufacturing, transportation, tourism, and trade are the worst hit by COVID‐19, which subsequently prompt massive layoffs that contribute to the rise of unemployment.
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SMEs and business sectors face roadblocks through supply chain disruption and purchasing power reduction.
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Apart from deaths and disabilities caused by the nature of the disease, aggressive measures to contain the spread of the virus such as physical distancing, stay at home orders, and ban on mass gatherings have significantly impacted the household economy, mainly for those who work in informal sectors such as street vendors and motorbike drivers, who are grappling to make ends meet. The economic toll of COVID‐19 in Indonesia has largely affected the household economy, SMEs, business, and financial sectors. This global turmoil and rapidly changing circumstances prompt us to evaluate the fiscal and tax policy to stabilize the national economy, particularly on how tax policy can aid governments in responding to the COVID‐19 crisis through the principles of flexibility, solidarity, and transparency.
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This unprecedented situation threatens to devastate economies and financial stability in Indonesia, with a significant hit on small and medium‐sized enterprises (SMEs), business, and financial sectors. Indonesia has reached 353,461 confirmed cases of COVID‐19 and 12,347 deaths as of Octomaking it the highest in Southeast Asia (Paddock & Sijabat, 2020). The number of cases has been skyrocketing since March, when the first two cases were reported. As of OctoIndonesia currently has the highest COVID‐19 fatalities in Southeast Asia. As with other countries across the world, Indonesia is grappling with the rapid spread of the coronavirus.
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