Increase Tax Revenue, Government Increases Middle Class Number

JAKARTA - The government through the Coordinating Ministry for Economic Affairs said it would increase the number of middle classes which are currently only 17.13 percent in order to increase state revenues from taxes.

Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, said that the middle class group is one of the biggest contributions to the Indonesian economy and can increase revenue from taxes.

"In fact, if we enlarge the middle class, apart from contributing to the economy, it is high with various incentives, the middle class can also be beneficial, right. So the taxation will be better," he said after the press conference, Tuesday, August 27.

Susi said the government was worried because of the decline in the middle class group from 2023 to 2024. So that the government wants to increase the portion, role and contribution of the middle class to the economy again.

"If the middle class increases in number, the tax base is automatically higher, the taxpayer is bigger. So that's just one aspect, taxation," he said.

Susi conveyed that the government has prepared various ways to improve the middle class, namely through providing incentives in the housing sector, such as increasing the quota of subsidized houses for the Housing Financing Liquidity Facility (FLPP) scheme and extending Value Added Tax (VAT) incentives. Government Borne (DTP) by 100 percent.

"We want the middle class to increase the number again because the share is to a very large economy, with some of the incentives. That's why we encourage the incentives for VAT and DTP, we are encouraged again incentives that target the middle class," he explained.

Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto said the government would continue to maintain and encourage the middle class, because it has a strategic role to support the economy, especially related to entrepreneurship and job creation.

"Of course investment is important, positive investment, and this will certainly make social changes, especially to achieve Indonesia's gold 2045," he said.

Therefore, Airlangga said the government would continue to maintain the middle class so that it could encourage stable and high economic growth.

"Because this will encourage classes to encourage our middle class to continue to grow and reduce those who are middle class or the decline from the middle class itself," he said.

Airlangga conveyed that to support the middle class, the government has launched several programs, including social protection programs, tax incentives, pre-employment cards, job loss guarantees, recipients of health insurance contributions, and people's business loans.

"These various programs are expected to hold back the number of middle class," he said.