Netray Analysis: 12 Percent VAT Decision For Goods And Luxury Services Dominated By Public Negative Reactions

The atmosphere of the press conference for the Economic Policy Package in Jakarta (16/12/2024), one of which resulted in the decision to increase VAT to 12 percent. (ANTARA/Bayu Saputra)

JAKARTA - The government has finally decided to continue to increase the Value Added Tax (VAT) to 12 percent which will take effect on January 1, 2025, even though this decision has received a fairly strong wave of rejection. Warganet assessed that the economic stimulus offered by the government as a result of VAT 12 percent did not help much.

The government announced in detail what items were affected by the 12 percent increase in VAT, most of which are goods and services classified as tertiary or luxurious commodities. However, what includes luxury goods according to the government are premium rice, premium salmon, to international private schools.

Actually, since the beginning, the increase in VAT rates has drawn protests from netizens. That's why when the government finally confirmed that 12 percent of VAT for luxury goods had become a trending topic for netizens X on Wednesday (18/12).

Netray noted that 12 percent of VAT-related talks on the day reached 103.8 thousand uploads, Netray reported.

Even over the past week, conversations about this increase have never run out. Like on December 12 when the conversation reached 1.2 thousand uploads when netizens linked this issue to the increase in Motor Vehicle Tax (PKB).

Netizens' protests are easy to read on the timeline because negative sentiment dominates the conversation. About 56 percent or as many as 56.8ibu uploads are conversations with negative tones, while positive sentiment is only 20 percent or 20.7 thousand uploads. To find out how netizens protested during the period 12 -18 December 2024 on social media X using the word keyppn&12, here is the full analysis.

The wave of rejection continues in the hashtag #TolakPPN12Persen. This hashtag is still the most common in the discussion during the monitoring period, as many as 16.3 thousand appeared. In the next place, there is the hashtag #PajakMen Strangling which reached 14.5 thousand uploads.

Through these hashtags, netizens echo what will be affected if the increase really happens. Among those that worry about the increase in VAT are Kpop fan accounts, including @nctzenhumanity, @perfectlysvt, and @Khhproject_ID.

@nctzenhumanity invites NCT (NCTzen) group fans to participate in voicing the rejection of the 12 percent increase in VAT. Meanwhile, @perfectlysvt and @Khhproject_ID called for the impact of the increase in concert ticket prices because of the regulation.

At the same time, the government has also issued a 2025 economic stimulus policy to maintain people's purchasing power, especially the middle class, which has been affected by the increase in VAT. This stimulus starts from the household sector in the form of rice assistance, a 50 percent electricity discount to the housing sector in the form of PPN PDT (Government Borne Tax).

But netizens felt that the assistance was not comparable to the tax increase. This was stated by several accounts such as @KangSemproel, which highlighted the assistance in the form of electricity discounts below 2,200 VA for just two months. He also calculated the assistance of 20 kg of rice equivalent to Rp. 300 thousand.

In addition to protests related to stimulation assistance, a number of other topics are also in the spotlight of netizens. As can be seen in the ranks of popular words or top words when netizens talk about the price of premium rice which is also subject to 12 percent VAT. Most of the word rice is called netizens so that they can be seen as being included in the top ranks of popular words.

This is because premium rice is included in 12 percent VAT, even though farmers are not guaranteed to eat and live. Meanwhile, the @frinana20 account feels cheated by the government because premium rice is subject to 12 percent VAT. Meanwhile, hybrid cars receive incentives, including sugar, flour, and oil, which is one percent borne by the government even though in the end comes from people's money as well.

Talks related to the increase in VAT 12 percent not only discussed criticism of the policy. Netizens are also actively comparing Indonesia's tax policies with other countries. For example, Vietnam's name appears in discussion because the country is rumored to be reducing VAT to eight percent.

This was revealed by the @Purplewithyell1 account which stated that countries such as South Korea, Australia, and Malaysia only applied 10 percent VAT, while Singapore set nine percent. On the other hand, Indonesia increased VAT to 12 percent, which is considered burdensome to the people.

Another account also highlights this difference by saying that the Indonesian Ministry of Economy is less intelligent than Vietnam, which dares to reduce VAT in order to encourage people's purchasing power. As a result, Vietnam will not only increase people's purchasing power but also state tax revenues. On the other hand, the increase in VAT of 12 percent in Indonesia is feared to weaken people's purchasing power.

Because as is known, this weakening purchasing power is partly due to the type of goods that will be taxed. The government does claim that only luxury goods are commodities.

However, netizens assessed that a number of other items would also be affected indirectly, such as soap. The @Es5e9ar account highlights that soap is not a luxury item, but that trucks carrying soap and their production machines are actually considered luxury goods. As a result, the additional cost of this tax will almost certainly be charged to consumers.

The government's decision to increase Value Added Tax (VAT) to 12 percent has triggered a massive wave of criticism by netizens. This increase not only has a direct impact on the price of luxury goods, but will indirectly affect people's purchasing power as a whole, which in the end can weaken Indonesia's economic conditions. The stimulus provided by the government is deemed incomparable to the increase in VAT to 12 percent which will last forever.