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Brilio.net - The plan to increase the Value Added Tax (VAT) rate to 12% in early January 2025 continues to be a hot topic. The public, especially users of social media platform X (formerly known as Twitter), have voiced their rejection of this policy. Many are concerned that the impact will further increase the burden on society amidst an economic situation that has not fully recovered .
Considering the various rejections of the 12% VAT increase, the Chairman of the National Economic Council (DEN) Luhut Binsar Pandjaitan spoke up regarding the implementation of the value added tax (VAT) rate of 12% which will be effective from January 1, 2025. He emphasized that this increase can certainly be postponed.
"Yes, it will almost certainly be postponed," said Luhut, quoted by brilio.net from Antara, Friday (29/11)
Previously, Finance Minister Sri Mulyani argued that the increase in VAT rates was actually regulated in Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (UU HPP). Based on these provisions, the government plans to increase the VAT rate from 11% to 12% on January 1, 2025.
This policy is considered a step to increase state revenue while maintaining the stability of the State Budget (APBN). Furthermore, according to Sri Mulyani, this increase is important to ensure that the APBN remains healthy. In addition, this policy is also considered a form of anticipation of the potential global financial crisis.
However, the less than supportive public response has led to the discourse of postponing this policy, because the government needs to consider its impact on people's purchasing power. So what is the reason for the DEN chairman to state the postponement of the 12% VAT increase? Check out the explanation as reported by brilio.net from various sources, Friday (11/29).
Reasons for postponing the 12% VAT increase in 2025.
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Quoting from Antara, the polemic of the 12% VAT increase is certain to be postponed as stated by Luhut Pandjaitan. Furthermore, the chairman of the National Economic Council explained that the implementation of the VAT increase was postponed because the government was still considering the scheme of providing stimulus or incentives first to the community. This economic stimulus will be given in the form of social assistance to the middle class.
"Before the 12 percent VAT is implemented, stimulus must first be provided to people whose economy is struggling," he explained.
However, the assistance in question is not in the form of direct cash assistance (BLT) but rather electricity energy subsidies. This electricity assistance is given because it is feared that the funds will be gambled.
"But it was given to electricity. Because if it is given to the people, they are afraid of being gambled with again," he said again.
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Considering the issue, various parties have voiced their support for postponing the 12 percent VAT increase, one of which is the Indonesian Chamber of Commerce and Industry. Citing Antara, the Indonesian Chamber of Commerce and Industry (Kadin) has submitted a request to the government to postpone the increase in the Value Added Tax (VAT) rate to 12%.
The Chairman of the Indonesian Chamber of Commerce and Industry, Arsjad Rasjid, said that the current economic conditions are not ideal for implementing the policy. This was conveyed in a press conference held in Jakarta, Friday (11/29).
Arsjad assessed that the impact of the VAT increase will be directly felt by consumers, so the government needs to review the policy. He also highlighted the difference in economic conditions when this policy was agreed three years ago with the current situation. Global geopolitical tensions and declining purchasing power in several countries, including the United States, are factors that worsen the overall economic situation.
Domestic economy, according to Arsjad, must be the government's top priority. He emphasized the importance of maintaining domestic economic stability as the foundation of national growth. In addition, he suggested that the government be more assertive in eradicating illegal imports that are considered detrimental to the local economy. According to him, this step will help strengthen the competitiveness of the domestic economy amidst increasingly complex global challenges.
(brl/jad)
