Sri Mulyani Wants To Raise VAT Rates, Airlangga: Will Be Discussed With The DPR

Illustration. (Photo: Unsplash)

JAKARTA - The government, through the Minister of Finance (Menkeu) Sri Mulyani Indrawati, plans to increase the value added tax (PPN) rate. The goal is to optimize tax revenue. The plan to increase the value added tax (VAT) rate is expected to be realized soon.

Coordinating Minister for the Economy Airlangga Hartarto said that the government's efforts to raise VAT are currently under discussion. Even so, he acknowledged that this plan would be included in the draft law (RUU) on General Provisions and Tax Procedures (KUP).

"Regarding the VAT rate, the government is still discussing, and this is also linked to the discussion of the Law (UU) that will be conducted at the DPR, namely the General Provisions and Tax Procedures Bill (KUP), and this will all be discussed by the government later. delivered, "he said in a virtual press conference, Wednesday, May 5.

Referring to Law no. 42/2009 concerning the Third Amendment to Law no. 8.1983 concerning VAT for Goods and Services and Sales Tax on Luxury Goods, the government can change the amount of levies.

The law regulates changes in tariffs at the lowest level at 5 percent and the highest at 15 percent. Meanwhile, the current VAT rate is 10 percent. The increase in VAT rates will have an impact on rising prices for goods and services.

Previously, Minister of Finance Sri Mulyani Indrawati explained that fiscal reform must be carried out to support fiscal consolidation and sustainability. One thing that is done is to increase income. As for how, with tax reforms that are healthy, fair and competitive.

Sri Mulyani explained, in terms of taxation or state revenue, his party will continue to explore the potential and increase the tax ratio, by expanding the tax base, especially in the era of digital economy and e-commerce.