12 Percent VAT Polemic, Democrat: Prabowo Heavy Decides 1 Percent Increase

Chairman of the Democratic Party BPOPKKK, Herman Khaeron.(Nailin-VOI)

JAKARTA - The chairman of the Democratic Party's BPOPKKK, Herman Khaeron, responded to the polemic regarding the increase in value added tax (VAT) from 11 percent to 12 percent as of January 1, 2025. Herman said President Prabowo Subianto was heavy to decide on a tax increase of 1 percent in the midst of difficult economic conditions.

"Of course we have to see why there is an increase of 1 percent, because it is indeed the duty of this government to implement it in accordance with the mandate of Law Number 7 of 2021 which was decided by both the government and the DPR ago," said Herman Khaeron at the Parliament Complex, Senayan, Jakarta, Tuesday, December 24.

"Therefore, it is not easy to make decisions. Pak Prabowo is definitely not easy to make decisions with this situation," he continued.

But on the other hand, continued Herman, the Government must carry out the mandate of the Tax Regulation Harmonization Law (HPP) which was ratified by the DPR RI. So that President Prabowo ordered that this 1 percent increase applies to certain categories of goods and services.

"On the other hand, the law must be implemented, even definitively as of January 1, 2025. Therefore, I think we just look at the policy, yes, when later the government announced that what would be applied was an increase of 1 percent or to 12 percent," explained Herman.

"This VAT is intended for luxury goods. So this luxury item is a consumption that is capable," he added.

Because it is applied to competent consumption, continued Herman, this increase policy must be accompanied by affirmative policies and prorakyat policies. Such as for free nutritious meals, hospital construction, free health checks, to school renovations.

"And I think this has also been conveyed by the government That at the time of implementing a 12 percent increase for luxury goods or worn for people who are capable, at the same time there are also prorakyat programs that are here to improve economic capabilities in society," said Herman.

"So the point is that there is an income from the competent circles and then it is shifted to those who really need it, I think this is really noble," added the member of Commission VI of the DPR RI.

In the future, the legislators for the Cirebon and Indramayu electoral districts, West Java, ask the government to prepare mitigation in the event of an impact or impact on the increase among other sectors.

"Therefore, for sectors that are the basic needs of the community, such as basic necessities at 0 percent, right, this is an affirmative policy. Then there are also incentives that will be given to people who are indeed low-income. This is also an incentive to improve economic capacity in certain class communities. In my opinion, the important thing is to maintain, so that this increase does not have an impact anywhere," said Herman.

Herman also believes that the government has planned more measurable mitigation and methods so that this increase is truly in line with what is expected. That the increase is applied in the luxury goods segment which is the segment of the capable society on the other hand.

"Of course in the short term this will also improve pro-people programs and strengthen the economy among other communities," he concluded.