JAKARTA - The government through the Ministry of Finance said that the regulation related to Value Added Tax (PPN) is an inseparable part of fiscal consolidation and steps to revise the State Budget to support optimal and sustainable tax revenue.
Special Staff to the Minister of Finance, Yustinus Prastowo, said the current VAT rate adjustment was a reflection of the principle of gotong-royong (work together).
“For people who can afford to pay more and those who cannot afford assistance. Low-income communities and MSME actors continue to receive support", he said in a press statement on Monday, April 18.
According to Yustinus, so far, all levels of the community's economy must bear the same VAT burden.
"Supposedly those who consume more or more exclusive goods or services must be regulated separately to create justice in tax collection", he said.
Sri Mulyani's subordinate also revealed that even though there are taxable goods and services, small and middle-income people will still not pay VAT on consumption given the tax exemption facility.
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"Facing the COVID-19 pandemic, the State Budget has become the main instrument to protect the public and restore the economy. The state budget is always a cushion so that the national economy does not sink further. If it is postponed, social protection programs will also be affected", he explained.
For information, the government has drafted the Law on the Harmonization of Tax Regulations (UU HPP) which is an important part of tax reform and is claimed to be useful for building a just, healthy, effective, and accountable taxation foundation, in the medium and long term.
One of the mandates in the HPP Law is the adjustment of the Value Added Tax (VAT) rate from 10 percent to 11 percent which has been in effect since April 1, 2022.
“Taxes are an important instrument to support the Indonesian economy. For this reason, to be able to finance development and maintain the health of the state budget, strong state revenues are needed. The foundation of the tax system also needs to be continuously improved", concluded Yustinus.
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