Chairman Of Commission XI DPR: Director General Of Taxes Unable To Carry Out Prabowo's Order Should Write A Resign Letter

Chairman of Commission XI DPR RI Mukhamad Misbakhun. (Photo: ANTARA)

JAKARTA - Chairman of Commission XI DPR RI Mukhamad Misbakhun assessed that the Directorate General of Taxes at the Ministry of Finance (DJP Kemenkeu) had made different interpretations or provisions with President Prabowo Subianto's orders regarding the application of an increase in Value Added Tax (VAT) to 12 percent.

According to Misbakhun, this interpretation creates public distrust of the supreme leader.

"If the Director General of Taxes is unable to carry out the order of Mr. President Prabowo, he should choose to write a letter of resignation (resign) because what has been made regarding the technical implementation rules is no longer in accordance with the wishes and wishes of Mr. President Prabowo," he said in his statement, Friday, January 3.

He suggested that the Ministry of Finance's DGT should make regulations in a simpler language, so as not to cause multiple interpretations and continue to use the mechanism for drafting the right regulations.

"Has the Ministry of Finance, especially the Directorate General of Taxes, translated the president's instructions properly?" he said.

Misbakhun conveyed that related to the technical implementation rules in the Minister of Finance Regulation (PMK) Number 131 of 2024, it has subjective interpretation of Law Article Number 7 of 2021 concerning Harmonization of Tax Regulations (UU HPP), resulting in implementation that causes uproar among the business world.

Misbakhun said that the preparation and decision-making were very tight with the implementation of the change in VAT rates not giving entrepreneurs time to prepare for changes in the system.

"Even though in the end the VAT is owed, it can be recalculated using the mechanism in the VAT Period, but it makes people have to pay more than they should," he said.

Misbakhun explained that President Prabowo on December 31, 2024, had determined that the implementation of the increase in VAT from 11 percent to 12 percent specifically was imposed on luxury goods and services that had been subject to VAT on luxury goods, which were consumed by the community.

"Surprisingly, the clear order cannot be translated clearly by bureaucrats in the Ministry of Finance, especially the Directorate General of Taxes (DJP) so that the implementation rules in PMK are very confusing and cause confusion in their application because they use the basis of imposition with another value 11/12 where there is a single interpretation as if the HPP Law cannot apply VAT rates at multi-rates," he explained.

According to Misbakhun, even though it is very clear that Article 7 of the HPP Law does not prohibit multi-VAT rates, so there is no prohibition regarding the application of 11 percent VAT rates and 12 percent of VAT is implemented simultaneously.

"But when PMK 131 creates a basis for confusing calculations in the business world in implementing the 11 percent VAT rate which does not increase by using other basic terms of imposition, this raises questions about the loyalty of bureaucrats at the Directorate General of Taxes specifically at the Director General of Taxes in translating the clear order of Mr. President Prabowo," he said.

To note, the Ministry of Finance issued PMK Number 131 of 2024 which states that goods/services that are not in the category of luxury goods are subject to VAT with a rate of 12 percent multiplied by the Tax Imposition Basis, where the Tax Imposition Basis is another value, in this case 11/12 of the selling price, replacement, or import value.

As for the Transition Period on January 1, 2025 to January 31, 2025, the imposition of Luxury Goods VAT is subject to a rate of 12 percent with the same DPP as Goods or Services that are not luxury goods.

According to him, Prabowo wants the applicable VAT rate to be 11 percent, and not 12 percent for goods or services that are not luxury goods. However, he continued, the regulation states that the applicable VAT rate is 12 percent.

"Indeed, the basis for tax imposition or the multiplying factor uses another value of 11/12 of the selling price with the final result of the VAT value collected still 11 percent or VAT does not experience an increase in tariffs. However, this regulation causes unrest in the community, where several retail companies have collected VAT of 12 percent, as stated by the Director General of Taxes in Media Briefing on January 2, 2025," he concluded.