THE GOVERNMENT has planned an increase in value added tax or (VAT) of up to 12% in 2025. This increase in VAT has reaped pros and cons among the public, because it is considered that it will have an impact on the community’s economy, which is currently experiencing difficulties.
The plan to increase the VAT rate is said to be able to realize tax optimization in Indonesia. However, the VAT increase policy must be considered once more, this is because the lower middle class will make greater sacrifices.
INDEF Center of Macroeconomics and Finance researcher, Abdul Manap Pulungan, said that the increase in VAT rates would have an impact on the economy.
“Don’t let this increase in VAT suppress economic growth because during 2023 our economic growth has indeed fallen from 5.31% in 2022 to 5.05% in 2023,” he said at the INDEF Public Discussion on Wednesday (20/3).
As is known, 2022 is the year when VAT will increase from 10% to 11% and the increase in VAT will not have a significant impact on the Indonesian economy because it is accompanied by an increase in world commodity prices.
“Why won’t growth be felt in 2022 even though at that time there was an increase in VAT rates, as we know in 2022 there will be a very significant increase in world commodity prices so that the VAT increase will not have a significant impact on the economy,” he explained.
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In the midst of the current bad economic conditions and the increase in VAT next year, he is worried that people will save on shopping.
“Because he is on guard to anticipate increases in other factors, especially inflation,” he said.
In 2023, he continued, several purchasing power indicators will indeed decline, especially household consumption, which will see a decline from 4.9% to 4.82%.
“The worry is that when VAT went up yesterday (2022), people tended to go on vacation which in the end caused consumption sectors that are not basic needs to decline. In fact, household consumption other than food items also has a big influence on economic growth. More than “50% of our economy is made up of household consumption,” he concluded.
(Z-9)
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