PHRI Bali Asks Government To Postpone 12 Percent VAT Increase, Entrepreneurs Must Pay Debt

UNSPLASH/Rue S ILLUSTRATION

DENPASAR - Deputy Chairperson of the Indonesian Hotel and Restaurant Association (PHRI) Bali, I Gusti Ngurah Rai Suryawijaya, asked the central government to postpone the Value Added Tax (VAT) plan which will increase from 11 percent to 12 percent starting in early January 2025.

Suryawijaya said the increase in VAT was recognized within reasonable limits but the economic situation on the island of Bali is said to have only recovered after the COVID-19 pandemic.

"If it could be postponed, it would be postponed. After our economy is really strong. Because this competition is also tight with other countries," said Suryawijaya, Monday, November 18.

He emphasized that PHRI did not reject the 12 percent increase in VAT but was considering the current tourism situation on the Island of the Gods.

"If we can hope that from the perspective of tourism entrepreneurs, we will postpone it until our economy is really strong. And we just recover, not refuse, this delays, I said not refuse," he explained.

"So according to the perspective of tourism entrepreneurs, the PHRI chairman is expected to postpone it first, because one of our considerations is that the tourism economy has just recovered and has just risen," he said.

Previously, Minister of Finance Sri Mulyani revealed that the increase in VAT to 12 percent starting in 2025 was still in accordance with the mandate of Law Number 7 of 2021 concerning Harmonization of Tax Regulations.

Sri Mulyani emphasized that there has been no discussion on the implementation of tax increases. Although there is a lot of debate over raising taxes amidst the weakening of purchasing power, Sri Mulyani reminded the state budget as an instrument for absorbing shock absorbers in the economy must maintain its health.

"The state budget must still maintain its health because the state budget must function and be able to respond in global episodes of financial crisis. We still have to maintain the countercyclical," he said in a working meeting with Commission XI.