MPR Leader Asks Government To Detail Luxury Goods Category Affected By 12 Percent VAT

JAKARTA - The MPR leadership asked the government to more detail the category of luxury goods and services affected by the value added tax (VAT) by 12 percent as of January 1, 2025.

This is intended to answer the public's confusion in implementing the policy and at the same time being able to choose which items they need.

"If we look at the items per item, there are a lot of them. So I think the government will also have to make more detailed negotiators," said MPR Deputy Chair Eddy Soeparno, Monday, December 23.

"So that the public can know when I want to buy this product, whether to pay for the old VAT or the upcoming 12 percent VAT," he continued.

The PAN politician assessed that the government should consider whether the taxable goods should be raised or not. According to him, domestically produced goods should not be subject to an increase in taxes.

"In our view, if the producer is a domestic producer, domestically produced, which is a domestic worker, whose raw material component is domestic. I think it is very feasible to consider (not subject to VAT, ed) and that is a basic necessity, yes," said Eddy.

"But again, it is the government's consideration," he continued.

Eddy gave an example of an incident in the Philippines, where there is a possibility of a decrease in purchasing power after this VAT is implemented. However, on the other hand, the community will also receive long-term effects from state revenues.

"If we look at the track record, yes, the track record of the same thing happens in neighboring countries, in the Philippines, they have also experienced a process like this. Indeed, on one side it will be seen that there will be a decrease in purchasing power, there will be an effect of inflation, but in the medium and long term it will be seen that there will be an increase in state revenue. The increase in state revenue can actually be useful to increase social cushioning, adding even longer economic incentives," said Eddy.

"So I think the positive effect that can also be caused later from the 12 percent increase in VAT will later return to the community," he added.

According to Eddy, the government has anticipated the impact of the increase in VAT to 12 percent. Later, he said, people can still enjoy the assistance provided by the government even though the term is not long.

"So indeed on one side it seems that there will be an increase, but on the other hand the government has provided preparations for the people most affected. So that they can still enjoy 0 percent VAT for their basic and basic needs," he concluded.