About 11 Percent VAT Increase, Hipmi: Hard For Entrepreneurs, But Government Needs Income

JAKARTA - The increase in food prices, value added tax (PPN) to fuel oil (BBM) is considered by the public as a form of government impartiality to the people. The reason is, the increase occurred at the same time as the moment of Ramadan.

Chairman of the Finance Division of the Indonesian Young Entrepreneurs Association (Hipmi) Anggawira said the increase in the price of basic commodities was due to an increase in demand, on the other hand, supply to the market was hampered which caused the spike.

While the increase in VAT from 10 percent to 11 percent, said Angga, this can't be denied. Although the current conditions are also burdensome for entrepreneurs.

"There are many basic calculations, the government needs income, it's really hard, for entrepreneurs there is an increase in VAT even though it is 1 percent. This is the way the government has thought of, one of which is the increase in VAT," he told reporters, Sunday, April 10.

According to Angga, when compared to neighboring countries, the 11 percent VAT increase is much lower. This is because the average increase in neighboring countries reaches 15 percent.

"But yes (even though) it looks small but the impact is cumulative," he said.

Meanwhile, said Angga, the government was in a dilemma regarding the increase in Pertamax fuel. Because the previously set price was far below the economic price, this made Pertamina lose money. For your information, the government has officially raised the price of Pertamax from Rp 9,800 per liter to Rp 12,500 per liter. Meanwhile, the economic price for this type of fuel product has reached Rp. 16,000 per liter.

"Like it or not, because the price of (crude) oil continues to rise, there is no other way but to increase it to achieve economics. Let alone in Indonesia, in other countries, the increase is more severe. So in my opinion, like it or not," he said.

"The government is also heavy for (subsidy) too high, what is the formula. It does trigger inflation and many things, but its the only way, there is no other way," he continued.

For this fuel substitution, said Angga, the government can accelerate the use of electric fuel for private and public vehicles.

"That's the only way, because in the APBN, the gap between the realization of our oil lifting is still high, so like it or not," he said.