The Minister Of Trade Gave Oily Reasons, Wheat Flour And Industrial Sugar Were Not Affected By 12 Percent VAT

Minister of Trade Budi Santoso (Photo: Antara)

JAKARTA - The government officially raises Value Added Tax (VAT) to 12 percent next year. However, for consumption materials such as Oilita, wheat flour and industrial sugar are not affected by the increase in VAT.

The Minister of Trade (Mendag) Budi Santoso revealed that the three basic necessities received 1 percent VAT incentives so that the VAT imposed for next year remained 11 percent.

"To maintain the purchasing power of people with low income, especially for the consumption of basic necessities or bapok, the government provides 1 percent VAT incentives in government responsibility, namely PPNDTP," he said at a press conference, at the Coordinating Ministry for the Economy Office, Jakarta, Monday, December 16.

Budi explained that the reason why Oilita was not subject to VAT was 12 percent because the cooking oil was needed for low-income people (MBR). In addition, Oilita is also cooking oil from the domestic marketing obligation (DMO).

Minyakita merupakan minyak goreng hasil DMO yang dibutuhkan bagi masyarakat pendapatan rendah sehingga tidak ada perubahan harga di masyarakat meskipun ada VAT 12 persen. Dengan adanya insinasi ini diharapkan tidak terjadi penurunan realisasi penyaluran DMO, jelasnya.

Meanwhile, continued Budi, wheat flour is also a consumption material that is needed by the community in their daily needs. So there needs to be incentives so that there is no increase in prices.

"And the third is PPNDTP industrial sugar with an explanation that industrial sugar is an important input for the food and beverage industry, so incentives are needed to continue to drive industrial activities," he said.

Previously, it was reported that the Coordinating Minister for the Economy Airlangga Hartarto said the government had provided a stimulus to increase Value Added Tax (VAT) by 1 percent, so that certain goods were not affected by the 12 percent increase in VAT.

Furthermore, Airlangga said certain items that received the VAT stimulus included Oilita, wheat flour and industrial sugar.

"The government provides a stimulus or economic policy package for low-income households, the VAT is borne by the government with 1 percent for basic and essential goods, namely Oilita, used to be bulk oil, it was given 1 percent, so it didn't go up to 12 percent," he said at a press conference at the Coordinating Ministry for the Economy Office, Jakarta, Monday, December 16.

"Then wheat flour and industrial sugar, so each remains at 12 percent, which is 1 percent borne by the government," he continued.

Furthermore, Airlangga said this stimulus was given to maintain people's purchasing power, especially for basic needs and in particular.

"Industrial sugars that support the food and beverage processing industry whose role in the processing industry is quite high, namely 36.3 percent, also still 11 percent," he said.