Sri Mulyani Wants To Raise VAT Rates, Sandiaga Uno: I Don't Think The Time Is Right

Minister of Tourism and Creative Economy Sandiaga Uno and Minister of Finance Sri Mulyani. (Photo: Doc. Antara)

JAKARTA - The government's plan to increase the Value Added Tax (PPN) rate since the last few days has become a public concern. No exception the Minister of Tourism and Creative Economy (Menparekraf) Sandiaga Uno.

Sandi, as he is usually called, is of the opinion that the increase in VAT rates is not yet in time. This is because the parecraph sector has not yet recovered from the impact of the COVID-19 pandemic.

"In my opinion from the creative economy side, the increase in VAT will (have an impact) especially on tourism and creative economy actors who are experiencing difficulties. We feel that in terms of timing it is not yet the right time. Therefore we must provide input, especially from sectors that are depressed due to the pandemic. like a parecraph, "he said, in a virtual press conference, Tuesday, May 18.

Sandiaga asked the government to consider an increase in VAT rates in the parekraf sector. This is because this sector has been hit hard by the impact of the COVID-19 pandemic. However, he said, for other sectors outside of the parekraf, this VAT rate increase could be considered.

"For our sector, we ask for special consideration. If not, then the business world will be even more burdened," he said.

According to Sandiaga, if the increase in VAT rates is still applied to the tourism sector and the creative economy, there will be potential for layoffs or layoffs.

"Finally, the decision resulted in unavoidable layoffs or layoffs. Our hope is that it can be considered for our sector," he said.

Previously, the Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, said that this plan was still being discussed internally at the Ministry of Finance.

"The point is we respect the discussion of internal discourse at the Ministry of Finance, but there is no coordination meeting between ministries to discuss this," he said in a virtual press conference, Monday, May 17.

Susiwijono said that his party would immediately ask the Ministry of Finance for an explanation regarding the VAT rate increase plan if there is a definite plan. This is because this policy will affect all sectors.

"Surely later we will ask to be scheduled immediately if there is a definite plan and there is a clear conception about when it will be delivered. Because this affects all sectors, not only the real sector, all manufacturing industry sectors will be affected, that's why we have reported it," he explained.

According to Susi, the Coordinating Ministry for the Economy promised to provide a more detailed explanation of the planned increase in VAT rates in the next two days or Wednesday, May 19.

"Within 1-2 days, I will discuss it with friends from the Ministry of Finance and later on Wednesday we will explain the details," he said.

The plan to increase the VAT rate will be submitted to the DPR

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) which will be carried out to 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 regarding 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, the Institute for Development of Economics and Finance (Indef) asked the government, in this case the Minister of Finance Sri Mulyani, to review the plan to increase the value added tax or VAT rate from 10 percent to 15 percent next year.

Executive Director of Indef Tauhid Ahmad assessed that the government's plan to increase VAT rates in the midst of an unstable economic situation was an inappropriate step.

"The 15 percent increase in tariffs must be reviewed if necessary to cancel because until 2022 and even 2023 we are still in a period of economic recovery," he said in a virtual discussion, Tuesday, May 11.

Tauhid argued that the plan was not right because no party could confirm when the pandemic would end. So it is estimated that the condition of the community is still unstable.

"There is still a big burden on the economy so if it is burdened by the planned VAT increase, I think it will be quite a serious problem," he said.

Furthermore, Tauhid said that the level of community welfare next year is estimated to be relatively stagnant. In fact, it has decreased. So it shows that there has been no significant increase in economic activity.

Meanwhile, said Tauhid, in terms of people's purchasing power, inflation, consumer confidence index for next year are also predicted not to recover so that it still needs assistance from the government and is not burdened with an increase in VAT rates.

In fact, Tauhid said that from the perspective of real competitiveness, Indonesia's VAT rates compared to other countries were relatively the same, namely around 10 percent.