General Chairperson Of GAPMMI Supports The Implementation Of 12 Percent VAT On Luxury Goods

JAKARTA The General Chairperson of the Indonesian Food and Beverage Producers Association (GAPMMI), Adhi S Lukman, gave a response regarding the government's plan to implement a 12 percent Value Added Tax (VAT) increase in 2025 for several luxury items.

According to Adhi, if VAT is applied only to luxury goods that are subject to the Sales Tax on Luxury Goods (PPnBM) there will be no problems.

"I think if VAT is applied to luxury goods, I don't think there is a problem. Because the purchasing power of the upper middle class is still quite tough," said Adhi, quoted on Sunday, December 8.

He added that what needs to be a major concern is to protect the purchasing power of the lower class. Because if the implementation of VAT is 12 percent on basic necessities such as food, which are currently in quite a lot of condition, it can be even more burdensome for the lower class.

Adhi emphasized that in the midst of the current challenging economic conditions, people's purchasing power is a big challenge. "For industry, there are many challenges, such as rising raw material prices, provincial minimum wages (UMP), logistics costs, and others. This is still a big challenge for us," he explained.

However, Adhi provides his support for the option of increasing VAT by 12 percent by 2025 for goods that are not included in basic needs. "If the option goes up for the upper class, go ahead," he said.

Regarding the potential for confusion if the implementation of VAT is only partially, Adhi stated that there are no problems as long as the category is clear. "The important thing is the category is clear," he said.