Sri Mulyani Prepares Subsidy Compensation For The People If The Staple Food Tax Is Implemented

JAKARTA - It is known that the government and the DPR are currently working on a draft law (RUU) regarding the fifth amendment to the General Provisions and Tax Administration (KUP). One of the important agendas discussed was the continuation of the discourse on the imposition of taxes on a number of basic necessities (sembako).

The government represented by the Minister of Finance Sri Mulyani (Menkeu) said that the agenda was an effort to bring justice to the community.

"This discussion regulates the expansion of the VAT tax base (Value Added Tax) with a reduction in VAT exemptions and facilities to better reflect fairness and targeting," he said at the Senayan Parliament Complex, Jakarta, as broadcast via virtual channel, Monday, September 13.

In his explanation, the Minister of Finance said that apart from basic necessities, several other sectors could also be subject to tax levies.

"For goods and services that are consumed by many people, such as basic necessities, education services, and health services, VAT is imposed at a lower rate than the normal rate," he said.

According to the Minister of Finance, the government is also likely not to impose VAT on certain basic goods that are considered to be consumed by the wider community and are categorized as lower middle class.

"Or it can also not be collected VAT," he said.

Furthermore, the state treasurer also ensures that the imposition of VAT on basic necessities will be accompanied by the provision of compensation as an element of protection to the public for policies implemented by the state.

“People who can't afford it can be compensated by providing subsidies. Through this scheme, the principle of justice can be further realized. Because we can talk about staple food, education, or health but those who access these are not the same and can include (citizens) who have very high incomes," he explained.

In the editorial notes, there are three schemes in the implementation of the Value Added Tax (VAT) for basic necessities. First, the proposed VAT of 12 percent. Second, the multi-tariff scheme is 5 percent lower than the first scheme by strengthening legality through a Government Regulation. And the third is through the final 1 percent VAT method.

Before being discussed by the government and the DPR today, the draft KUP Bill was leaked to the public last June and caused a stir in the country.