Cancel 12 Percent VAT, Tax Rich People Through Wealth Tax!

A number of students who are members of the BEM SI Kerakyatan Alliance demonstrated against the plan to increase VAT by 12 percent in the Horse Statue area, Jakarta, Thursday (12/26/2024). (ANTARA/Hafidz Mubarak A/foc)

JAKARTA Indonesia's economic condition is said to be not doing well. But maybe not many think that the distance between rich people and ordinary people is getting too far. This is reflected in the Center of Economic and Law Studies (Celios) research which revealed that the increase in the wealth of trillioners jumped dramatically at the same time with labor class difficulties.

In development glasses in Indonesia, the measure of progress is often measured based on Gross Domestic Product (GDP) and infrastructure development. However, according to Fiscal Justice Director Celios, Media Wahyudi Askar, both are referred to as pseudo indicators.

On paper, this indicator shows rapid economic growth. But behind these indicators there is deepening economic inequality.

" Measurements that focus too much on macroeconomic figures often forget the meaning of the hakiki from development, namely ensuring that the benefits of economic growth really touch all levels of society, regardless of how thick their wallet contents are," the Media wrote in the report.

In the middle of this year, the name of the Chairman of the Indonesian Solidarity Party (PSI) who is also the youngest son of the Seventh President Joko Widodo (Jokowi), Kaesang Pangarep, and his wife, Erina Gudono, was blasphemed by Indonesian netizens because they were caught using private jets on their way from Solo to the United States to take care of their master's education.

There are allegations of gratification in the use of Kaesang's private jet and his wife to the US, but this was denied by the Head of Pro Jokowi Volunteers (Projo) Budi Arie, who at that time was still the Minister of Communication and Information.

This incident occurred when various elements of society held demonstrations in a number of areas, including the DPR Jakarta Building, demanding that the DPR follow the representatives of the Constitutional Court (MK) regarding the threshold for nomination of heads and deputy regional heads.

The Constitutional Court stated that political parties that do not get seats in the DPRD can nominate pairs of candidates for heads and deputy regional heads. Calculation of the requirements to propose candidate pairs is only based on the results of the legal votes acquired by political parties or coalitions of political parties in the election in the regions concerned ranging from 6.5 to 10 percent.

Ironically, in the midst of criticism directed at him, Erina was instead considered deliberately showing off her luxurious life during her trip to the US. Starting from bread for Rp. 400 thousand to a baby train that is estimated at tens of millions.

So netizens also think that Kaesang and Erinatone deafalias do not understand what other people feel, in this case the people of Indonesia.

In the midst of Erina's life, which is shrouded in luxury, there are hundreds of thousands of Indonesians who have lost their jobs due to layoffs (PHK), decreased people's purchasing power, and the number of middle classes has declined. Even though the middle class is the support of the Indonesian economy.

Reflecting on the use of private jets that became polemic, Celios released a study with the title PersonalJet for Si Kaya and Sepeta Butut for the Poor. In the report, Celios described how inequality in the economy in Indonesia is real.

"Since 2020 the income of the three richest people in Indonesia has more than tripled, while the wages of workers have only increased by 15 percent in the same period. This is a reflection of inequality that further hampers social mobility," said Executive Director of Celios Bhima Yudhistira.

The term word people get richer and the poor get poorer, it seems right to describe this situation.

In its report, Celios revealed that there was a significant increase related to the wealth of the top three trillioners in Indonesia in the 2020-2023 period. The total increase in the wealth of these trillioners is estimated to reach 174 percent. Some of the trillioners mentioned in the Celios report are Lim Hariyanto Wijaya Sarwono, Low Tuck Kwong, and Prajogo Pangertu.

Celios provides an analogy of the economic inequality of paracrazy richini and ordinary people. In his findings, Celios said that the combined assets of the 50 richest people could pay all workers' salaries in Indonesia for one year. Even the value of the wealth of the 50 richest people in Indonesia is also equivalent to the wealth of 50 million people in general.

There are two important groups that are referred to in this study, namely a list of the 50 richest people in Indonesia according to Forbes and a list of the wealth of ministers in Jokowi's Cabinet.

Meanwhile, in the research, it was explained that the working class had to survive harder in line with wage growth which only increased by 15 percent. When people try to find shortcuts through illegal online loans (pinjol), they are even stuck in a mounting debt due to soaring loan interest.

The suffering of ordinary people does not stop there. The government finally knocked the hammer, ratified the increase in Value Added Tax rates to 12 percent, and at the same time the discourse on granting tax amnesty or tax amnesty for the rich was widely heard.

The call of a number of economic observers so that the government cancels the 12 percent VAT rate is ignored. In fact, increasing VAT will only erode the purchasing power of the middle class, which has recently become increasingly difficult. Likewise, the government has the potential to reach Rp. 81.6 trillion, which the government does not heed.

"Public the increase in VAT rates of 12 percent first. Tax the rich through wealth tax because there is a potential of IDR 81.6 trillion," Bhima told VOI.

In addition, Bhima said, it is better if the carbon tax, coal production tax, and taxwindfall of extractive profitmodity needs to be implemented. Improved tax compliance must also be done, so that the tax ratio can increase without burdening lower middle class purchasing power.

This wealth that is not evenly distributed, according to Celios, must be addressed immediately. According to him, it will be ironic when people who struggle to live in the midst of the trap of a high-interesting debt cycle are still burdened with various tax bills. Meanwhile, Indonesian trillioners who reap wealth from businesses in the country actually live comfortably in neighboring Singapore.

"The government needs to take firm steps to overcome this inequality. The current tax amnesty policies and fiscal incentives tend to benefit large companies and rich people, while the lower middle class people are forced to pay taxes," concluded Fiscal Justice Director Celios, Media Wahyudi Askar.