Chairman Of Banggar DPR Calls The 12 Percent VAT Increase To Support Prabowo's Strategic Program

Chairman of the DPR Budget Agency (Banggar) Said Abdullah. (Photo: Doc. ANTARA)

Chairman of the DPR Budget Agency (Banggar) Said Abdullah said that the increase in VAT was 12 percent in 2025 to support President Prabowo Subianto's strategic program.

"In the discussion of the 2025 State Budget, the government and the House of Representatives also agreed on a state revenue target assuming the implementation of VAT 12 percent to support various strategic programs of the President, Mr. General Purn Prabowo Subianto to realize his strategic program such as the quick win program which will be funded by the 2025 State Budget," he explained.

Said said that his strategic programs, such as the quick win program which will be funded by the 2025 State Budget, namely Free Nutrition Food (MBG) which requires funds of around Rp. 71 trillion, Free Health Checks of Rp. 3.2 trillion, Complete Hospital Development in Regions of Rp. 1.8 trillion.

Then, examination of infectious diseases (TBC) Rp. 8 trillion, Renovation of Schools Rp. 20 trillion, Integrated Superior Schools Rp. 2 trillion, and National, Regional and Village Food Barns Rp. 15 trillion.

"Before April 1, 2022, the VAT rate is valid at 10 percent. After Law No. 7 of 2021 applies, it is regulated that the VAT rate increase will be 11 percent as of April 1, 2022, and then January 1, 2025, the VAT rate will be 12 percent, so there will be a gradual increase," he explained in his statement, Tuesday, December 24.

Said said that the government and the DPR agreed to include additional tax revenue assumptions from the implementation of VAT 12 into the state revenue target in the 2025 State Budget.

"The government and the DPR have agreed to include additional tax revenue assumptions from the implementation of VAT 12 percent into the state revenue target in the 2025 State Budget. Furthermore, the 2025 State Budget has been promulgated through Law no. 62/2024," he said.

Therefore, Said asked the government to mitigate the risk of the impact of increasing VAT from 11 percent to 12 percent by 2025, especially for poor and middle class households.

Said said that there are several risk mitigations that can be realized in a number of policies, including the need for additional budgets for social protection to the people; the number of beneficiaries of social welfare in thickness is not only for poor households but also almost poor or vulnerable to poverty.

"And ensure that the program is delivered on time and on target,"

Said conveyed that the next mitigation, namely the bbm subsidy, electric lpg gas for poor households, was expanded to medium-sized households, including online motorcycle taxi drivers, should still get subsidized bbm filling, even if necessary to reach the lower middle class group.

In addition, Said said that public transportation subsidies were expanded, which became a mode of mass transportation in various regions, especially big cities that had mass transportation modes.

Furthermore, housing subsidies for the lower middle class, at least the type of house is 45 and below, as well as flats.

Providing training and economic empowerment programs for the middle class by launching skills and economic empowerment training programs for the affected middle class, to help them switch to more developed and competitive sectors.

"Conduct routine market operations every 2 months in order to ensure that inflation is controlled and food commodity prices remain affordable," he concluded.