Apindo Hopes That The Government Will Postpone The 12 Percent VAT Policy

Illustration. (Photo: Doc. Antara)

JAKARTA - The Indonesian Employers' Association (Apindo) has asked the government to postpone the implementation of Value Added Tax (VAT) by 12 percent starting January 2025 because it is considered to be able to burden production costs.

"We from Apindo suggest that the government postpone the implementation of the 12 percent VAT policy," said Deputy Head of Apindo Manpower Division Darwoto in Cikarang, quoted by Antara, Sunday, December 29.

He explained, although the basic goods were not subject to 12 percent VAT, other goods in the production chain were still affected by production costs, such as raw materials which also experienced an increase in the imposition of the intended tax.

He reminded that the 12 percent VAT policy will also have an impact on people's purchasing power, especially for premium goods such as rice, fruits, fish, shrimp and meat.

Likewise with premium health services at VIP hospitals, international standard education and electricity for customers with a power of 3,600-6,600 Volt Ampere.

According to him, the 12 percent VAT policy is very different from the policies implemented in other developing countries. Like Vietnam, which recently lowered their VAT from 10 to eight percent.

"We hope that the government will be wiser in seeing the conditions ahead. If we look at Vietnam, it will turn out to be eight percent, how come this is even up for us," he said.

He also highlighted the policy plan to increase VAT to 12 percent in the midst of the government's decision to increase the Regency Minimum Wage (UMK) by 6.5 percent to coincide with the sluggish condition of the industrial sector.

"The automotive industry is now also down 30 percent. That means the derivative is also down. This means that there are costs added that must be borne by the company. If we can refuse, we refuse, but how do we refuse because it is the government's decision," he said.

Darwoto hopes that the government can postpone the implementation of VAT 12 percent. However, if the policy is still implemented, the government must produce other economic policies that can increase the enthusiasm of entrepreneurs and industry players.

"Indeed, we are still waiting for the stimulus to be issued by the government regarding the plan to implement the policy," he said.