Regarding The Plan To Increase VAT, Faisal Basri: Pay Attention To The Situation, This Is A Matter For The People's Stomach

Indef's senior economist, Faisal Basri. (Photo: Doc. Antara)

JAKARTA - The government's policy plan to add taxable goods and increase the rate of value added tax (VAT) has drawn reactions from various parties. Because, it is considered to reduce purchasing power.

Senior Economist Faisal Basri reminded the government to pay attention to the condition of the people in the country before making a decision. Faisal said that vulnerable people dominate the economy in Indonesia as much as 52.8 percent, while South Africa is the only country worse off than Indonesia.

"This is what we remember that our vulnerable population is still above half, their lives are still insecure," he said in a virtual discussion, Thursday, July 1.

Meanwhile, said Faisal, 50 percent of Indonesian people's spending is dominated by food and beverages. In fact, said Faisal, the richer a person is, the smaller the portion of spending on food. Generally, well-established people will use their income to buy insurance products, property or houses, or travel.

"We'll see the consumption pattern based on GDP, that's food still tends to go up in the last two months. Food is added to restaurants and hotels. So if I add restaurants and hotels it adds 10 percent, so it's above 50 percent. It's still a matter of business. stomach," he said.

Bottled drinking water dominates public spending

If you look at it in more detail, said Faisal, the largest expenditure is for processed products. While the second position is occupied by tobacco as much as 12 percent. As for food, in this case, rice is in the third position with a percentage of 11.35 percent.

"It turns out that the food and beverages consumed by the community are processed food and beverages, or process food, bottled water, etc., 35 percent. Frankly, I'm surprised, I haven't opened this data for a long time. Then tobacco is 12 percent. The third is only grains. 11.35 percent," he said.

Then, fish 7.91 percent of the total food, eggs and milk is quite large 5.66 percent. Fruits 4.79 percent, meat 4.33 percent. If the total is 88.11 percent. The rest are 11.89 percent. Meanwhile, if converted into rupiah, the overall per capita expenditure per month for the poor is IDR 572,000.

"So the government must be careful. Don't let VAT cause the number of poor people to increase. Because of the dominance of the consumption of the poor, which is reflected in the poverty line, about 3/4 of which is for food," he said.