Textile Association Asks For 12 Percent VAT Implementation To Be Postponed, Here's The Reason

Chairman of API Jemmy Kartiwa Sastraatmadja. (Theresia Agatha/VOI)

JAKARTA - The Indonesian Textile Association (API) has requested that the government postpone the implementation of Value Added Tax (VAT) by 12 percent, which is planned to take effect on January 1, 2025.

Chairman of API Jemmy Kartiwa Sastraatmadja said that an increase in VAT of 12 percent could reduce the performance of the national TPT industry.

"Certainly (will reduce the performance of the TPT) because the TPT industry, right, must compete with imported products," Jemmy told VOI when met after the Media Briefing agenda with Apindo in the Menteng area, Central Jakarta, Tuesday, November 26.

"That's what makes one with an increase in the UMP/UMK, automatically, right, triggering an increase in goods products which makes the disparity in the price difference between imported products and domestic products wider," he continued.

Jemmy assessed that this would further worsen the performance of the national TPT industry in the future.

"Yes, it can be concluded how to suppress the national TPT industry again," he said.

He also emphasized that the 12 percent VAT increase plan will make the national TPT industry unable to grow in the coming year. Instead, he said, it would be even worse.

"I don't think it's growth, it's actually a contraction. Now between 2023 and 2024 the TPT industry is not growing, it has contracted to decline," he said.

According to Jemmy, not only the TPT industry will be affected by the implementation of VAT 12 percent in 2025, but also from other industries.

"Yes, maybe not only in the TPT industry, I chatted with friends in other industries for the past few days, they are very worrying," he said.

Furthermore, Jemmy said that his party would hold a meeting in the near future with the Minister of Trade (Mendag) and the Minister of Industry (Menperin) to discuss this matter.

Given that there is a revision of the Regulation of the Minister of Trade (Permendag) Number 36 of 2023 to Permendag Number 8 of 2024, which is considered to be one of the causes of the collapse of the textile industry.

"I think all of this should sit together with the association. Maybe in the near future I will ask for his time (Minister of Trade) to meet, yes, with the Minister of Industry (Menperin) as well," he said.

When asked further when exactly 12 percent VAT could be implemented, Jemmy said when the Indonesian economy had recovered.

"Until the Indonesian economy recovers," he concluded.