Highlights in the media today: Expert debunks Surabaya’s ‘downward trend’ claim, wet market merchants vulnerable to COVID-19 infection, World Bank calls on Indonesia to reform tax administration, subsidies

Surabaya has recorded a daily average of around 100 new cases over the past two weeks. The local administration, however, insisted that the latest numbers reflected a “downward trend” in the number of cases reported in the region.

Airlangga University School of Public Health epidemiologist Windhu Purnomo said that the administration’s claim was incorrect. He explained that other indicators of the outbreak, such as the fatality rate, reproduction rate (Rt), and attack rate, all showed that the city was a high-risk zone.

Windu said that the fatality rate in Surabaya stood at 7.8%, far higher than the national’s average of 5.6%. The city’s Rt, which had previously fallen to 0.8 on June 17, had risen again to above 1.0.

As of June 24 16:03 (GMT+7), Indonesia had confirmed 49,009 COVID-19 cases with 19,658 recoveries and 2,573 deaths.

The COVID-19 containment efforts have been facing difficulties as people are rushing to embrace the transition to “new normal”. As a result, many economic players, such as wet market merchants, are now at a higher risk of contracting the virus.

A mass rapid testing at the Youfefa wet market in Jayapura found that 238 out of 1,058 merchants there showed reactive results. Papua had confirmed 1,511 COVID-19 cases with 717 recoveries and 16 deaths.

The Jayapura administration therefore conducted inspections in five districts to catch people who were not wearing masks. As many as 443 people were caught not wearing masks during the inspections and they were all given social sanctions, such as having to clean up public spaces while wearing noticeable red vests.

The World Bank is urging Indonesia to carry out reforms, especially on tax and subsidies, to improve the quality of the country’s public spending.

World Bank Senior Economist Ralph van Doorn said that Indonesia has a limited space for development due to its low revenue, as well as systemic constraints across sectors such as coordination challenges and inadequate data and information systems. Van Doorn said that Indonesia should reform subsidies, especially abolishing diesel fuel and fertilizer subsidies.

Van Doorn predicted that Indonesia’s fiscal space would become tighter post-pandemic as state revenues were unlikely to recover for some time, given sluggish commodity prices and reduced corporate income tax returns.

National Development Planning Agency (Bappenas) State Finance and Monetary Analysis Director Boediastoeti Ontowirjo said that the measures that the World Bank suggested were included in the country’s “core tax administration system” program that would be implemented by 2024. The reform on tax administration is expected to increase Indonesia’s tax-to-GDP ratio by 1%-1.5%, according to an International Monetary Fund (IMF) study.

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