Banggar DPR: The Government Cannot As Well As Lower VAT In The PHP Law

JAKARTA - Deputy Chairman of the DPR Budget Agency (Banggar) Wihadi Wiyanto said the government cannot immediately reduce Value Added Tax (VAT) which has been regulated in Law Number 7 of 2021 concerning Harmonization of Tax Regulations (UU HPP).

"The government cannot immediately cut the VAT rate. Moreover, the State Revenue and Expenditure Budget (APBN) for the 2025 fiscal year has been agreed upon by the government and the DPR," said the legislator of the Gerindra Party faction as reported by ANTARA, Monday, December 23.

Because, he said, Article 7 paragraph (4) of the HPP Law stated that Government Regulations (PP) to determine VAT assumptions with a tariff range of 5 to 15 percent could be made on the basis of the DPR's approval at the stage of discussing the State Budget Draft (RAPBN).

"In paragraph (4), if we read it, it is a Government Regulation that can be made by the government with the approval of the DPR, it is to determine the assumption that the tax revenue is in the range of 5 to 15 percent, so here it is said that the PP can be approved by the DPR and the government for the manufacture of the APBN draft, not just cut it immediately," he said.

This was conveyed in response to a statement by the Deputy Chairman of Commission XI of the Indonesian House of Representatives, Dolfie Othniel Frederic Palit, who said that the government could propose a reduction in VAT rates.

He assessed that Dolfie, a PDI-P cadre (PDIP) as the faction proposing the HPP Law, did not fully read every regulation contained in the legal umbrella.

"Regarding what was conveyed by Dolfie, that as the Chair of the Panja he did not understand this law, it was seen that when he read Article 7 paragraph (3), he did not read it in paragraph (4) completely," he said.

He also views Dolfie's statement as Chairman of the Working Committee (Panja) for the Draft Law on Harmonization of Tax Regulations (RUU HPP) during the 2019-2024 DPR RI period as a public lie and provocation of the people.

In fact, he continued, the HPP Law was a legislative product from PDIP when it became the ruling party of the DPR RI for the previous period.

"So this is a form of provocateur from the current conditions so that people are moving to demand the cancellation of this VAT," he explained.

Previously, Deputy Chairman of Commission XI of the DPR from the PDIP faction, Dolfie Onniel Frederic Palit, said that the Prabowo Subianto administration could actually propose a reduction in VAT tax rates.

He explained that the provisions contained in Article 7 Paragraph (3) of the HPP Law, where in Chapter IV it is stated that VAT for the tariff change range is at 5-15 percent.

"As mandated by the HPP Law, the VAT rate starting in 2025 is 12 percent. The government can propose changes to the tariff in the range of 5 percent to 15 percent (can reduce or increase), according to the HPP Law Article 7 Paragraph (3), the government can change the VAT rate in the HPP Law with the approval of the DPR," said Dolfie in a written statement, Sunday (22/12).