Don't Rush, The Government First Listens To People's Aspirations Before Raising VAT 12%

Photo by Wahyu Setiawan on Unsplash

JAKARTA - Chairman of the Indonesian House of Representatives, Puan Maharani, asked the Government to listen to the aspirations of the people first before raising the Value Added Tax (VAT) rate to 12 percent by 2025. This is because the increase in VAT will have a direct impact on people's lives.

"We hope that the Government can first listen to the aspirations of the entire community, from businessmen, teachers and all elements of society before deciding this very crucial matter," said Puan Maharani at the DPR Building, Parliament Complex, Senayan, Jakarta, Thursday, December 5.

Although the increase in VAT is a mandate from Law Number 7 of 2021 concerning Harmonization of Tax Regulations (HPP), according to Puan, the Government needs to consider the current economic conditions of the Indonesian people.

"Although it has been determined in the law, the government also has the right to then evaluate," said the first woman to serve as Chair of the DPR RI.

"Because we also have to see how the aspirations of the community and how the current economic situation is," continued Puan.

The former Coordinating Minister for Human Development and Culture is also optimistic that the Government will issue policies that prioritize the interests of the community. Puan also ensures that the DPR will oversee every policy issued by the Government so as not to burden people's lives.

"Hope from the DPR, and I am sure, the Government will definitely listen to the aspirations of the people first," said Bung Karno's grandson.

Minister of Finance Sri Mulyani said that the increase in VAT rates from 11 percent to 12 percent was needed, one of which was to maintain the health of the State Revenue and Expenditure Budget (APBN). Even so, many parties are worried that the increase in VAT rates could have a derivative impact, such as increasing the inflation rate and affecting people's purchasing power.

Even though the increase in VAT is a mandate from the HPP Law, the government actually has the authority to change the VAT rate not to 12 percent. Because based on Article 7 paragraph (3) the same law also stipulates that VAT can be changed to a minimum of 5 percent and a maximum of 15 percent.

In the plenary session closing the DPR session today, Puan also mentioned the condition of Indonesia, which is still facing various national development challenges, both external and internal.

Puan reminded that fiscal, monetary, real sector policies and national development policies are needed that can consolidate national agendas in building national power in the food sector, human resources, regional development, national industry, export commodities, and others.

"In addition to consolidating the national development agenda in the future, we must also continue to strengthen the quality of the performance of State Apparatus, Bureaucracies, Business Climates, Legal Certainty, which truly presents the state to provide a way for the people to get good service, which helps, facilitates, and prospers," explained Puan in a speech closing the DPR session.