Indonesia to support economy with $8 bln stimulus to counter virus impact

The government is also exempting companies in 19 manufacturing sectors from having to pay import taxes, while giving them a 30% corporate tax discount.

Refunds for value added tax would be made easier for companies, especially for exporters, to help manage cashflows.

The tax breaks, lasting six months starting in April, were estimated to cost the government 22.9 trillion rupiah.

Indrawati last month announced a 10.3 trillion rupiah stimulus package to support consumer spending and tourism, though some analysts thought it was too small to have a significant impact.

She did not provide details on the rest of the latest stimulus, but said the government would maintain its planned spending despite pressures on state revenue.

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Coordinating Minister for Economic Affairs Airlangga Hartarto also announced non-fiscal measures to shield the economy, including relaxing export rules for fisheries and forestry products and import rules for steel.

The loosening of rules on imports would be widened to cover strategic food items, such as sugar, flour and salt, he said.

Rules on loan restructuring for small- and medium-sized companies will be eased so banks can restructure loans regardless of size, Financial Services Authorities Chairman Wimboh Santoso said.

"This stimulus package is not directly linked to the stock market, but we hope this will provide some confidence to players in the financial markets," Santoso said.

Indonesia, the world's fourth most populous nation, confirmed its first coronavirus case only last week, but medical professionals are concerned there may be more.

Its central bank has been buying government bonds this week to help curb losses in the rupiah currency, as virus fears trigger a global market rout.

The country's main stock index plunged 5% on Friday morning and is heading for the biggest weekly drop since October 2008. The rupiah lost 2% to 14,810 a dollar, its weakest level since November 2018.