Government Opens Voice Regarding Implementation Of 12 Percent VAT Tariff Increase

Minister of Finance Sri Mulyani. (Photo: Doc. ANTARA)

Minister of Finance Sri Mulyani Indrawati opened her voice regarding the implementation of the Value Added Tax (VAT) increase policy to 12 percent as of January 1, 2025.

For information, the decision is contained in Law Number 7 of 2021 concerning Harmonization of Tax Regulations (HPP).

Article 7 states that the increase in VAT to 11 percent will take effect from April 1, 2022 and the increase will occur again on January 1, 2025, to 12 percent.

"The 12 percent VAT has also been discussed, including the political fatsun of the HPP Law, which we all discussed, have agreed but we respect the new government," he explained during a working meeting with Commission XI at the DPR/MPR Building, Jakarta, Tuesday, March 19, 2024.

According to Sri Mulyani, the new government has the right to change the policy that was previously agreed upon and could be adjusted to the directions and policies promised during the campaign.

"So if the VAT target remains 11 percent, it will be adjusted later," he explained.

In addition, Sri Mulyani said that she would design the 2025 State Budget according to the limits that have been regulated in the State Finance Law. Namely, the State Budget will be designed in the form of a baseline, meaning that it only contains mandatory and routine government spending.

So that from this posture, there will be fiscal space that can be utilized by the new government in the first year.

"We will signal how big the fiscal space is," he said.

On the same occasion, the Director General of Taxes Suryo Utomo explained that his party would conduct a study of the 12 percent VAT tariff adjustment while looking at the economic conditions and in its implementation, the DGT will wait for the transition of the new government.

"We will continue to carry out the study and this transitional government will also occur. So we are also waiting," said Suryo.