Jakarta – Member of the Indonesian House of Representatives Rieke Diah Pitaloka proposed to postpone or cancel the plan to increase the Value Added Tax (VAT) to 12 percent in 2025.
Rieke conveyed this during the DPR Plenary Session on Thursday, December 5, 2024, as quoted by Antara on Friday (December 6, 2024).
Based on the mandate of Article 7 of Law Number 7 of 2021 concerning the Harmonization of Tax Regulations, she stated that VAT can be changed not only to a maximum of 15 percent but also to a minimum of 5 percent.
“The decision to increase or not must consider the development of the economy and monetary policy as well as the development of basic commodity prices each year,” said Rieke as quoted by Antara.
Rieke stated that the fiscal and monetary issues affecting people’s lives are not in good shape. This is because the mass layoffs and deflation that have occurred over the past five months must be watched closely as they could lead to an economic crisis and an increase in the prices of basic necessities.
Rieke hopes that infrastructure development must consider the scale of priorities that affect people’s livelihoods.
She stated that there are many innovations and creative solutions to find sources of state budget that do not burden the people’s taxes and endanger the safety of the nation.
“I recommend in this plenary meeting, supporting President Prabowo of the Republic of Indonesia, first, to postpone or even cancel the plan to increase VAT by 12 percent in accordance with the mandate of Article 7, paragraphs (3) and (2) of Law Number 7 of 2021,” he said.
In addition, he also urged the Government to implement a self-assessment monitoring system in tax governance. In addition to being the main source of state revenue, he said, taxes can also serve as an instrument for eradicating corruption as well as a strategy for settling all state debts.
“This system, God willing, will ensure that all financial and non-financial transactions of taxpayers are reported completely and transparently,” he said.
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