Jakarta, – The Minister of National Development Planning (PPN)/Head of Bappenas 2014-2015, Andrinof Chaniago, revealed that the policy to increase the Value Added Tax (VAT) to 12% is a clear sign that the country lacks funds to finance government programs.
As is known, the government will raise the Value Added Tax (VAT) from 11% to 12% in January 2025. This plan for an increase has triggered public opposition. The reason is that the increase will be implemented amid weakening purchasing power.
“That’s a sign that Indonesia is short on money. If we’re talking about sources of money, it means the country, the government is short on money.” Yes, taxes, look for sources of taxes.
Increase the taxes, or find the tax base. “Yes, then they increase debt,” he said in Koneksi Cuap-Cuap Cuan, quoted on Wednesday (4/12/2024). According to Andrinof, this is due to the suboptimal sources of state revenue. For example, the sharing of natural resource revenues.
“It’s not that there are no other sources, there are those that are the rights of the state, but they are not taken.” Yes, that’s an example of natural resource revenue sharing. That’s a real example,” said Andrinof.
Andrinof cited the windfall profit from coal in 2021-2023 as quite large, but only enjoyed by a handful of parties.
“Not controlled by the state and used by a handful of people. That’s what is violating.”
This, according to him, is disheartening. In 2021-2023, coal prices soared high. Even reaching up to US$ 420 per metric ton. At that time, the entrepreneurs were having a blast. Their profits, according to Andrinof, can reach Rp 1 trillion – Rp 2.7 trillion per individual. Meanwhile, they do not get directly involved; most entrepreneurs only provide subcontracts for dredging or mining logistics.
“Yeah, they get it easily, without breaking a sweat, just with a permit, and then subcontracted,” he said.
At that time, the government was considered not to receive a fair share of the profits, whether in the form of PNBP, corporate income tax, or export duties. However, according to Andrinof’s calculations, the total value of coal production during that period could reach Rp 3,000 trillion. From that value, Andrinof stated that the state only received hundreds of trillions. However, within it, there are the rights of the state and the rights of the Indonesian people.
“So, if we look at the total production over two years, it’s more than Rp 3,000 trillion. Rp 3,000 trillion is almost equivalent to one year’s national budget. The state only received Rp 144 trillion. In the second year, 2022, if I’m not mistaken, it was around Rp 150 trillion. Compared to the total value, that’s very small.” Meanwhile, there is the people’s wealth, the state’s wealth,” he emphasized.
According to Andrinof, if the state receives 40-45% of the production value, its revenue could reach Rp 1,000 trillion. Moreover, if the profit-sharing rate is applied today, the state could still receive Rp 300 – Rp 800 trillion from the total production value.
From BPS data, Indonesia recorded a total volume of coal exports experiencing an upward trend in 2021-2023, namely 345.45 million metric tons in 2021; 360.11 million metric tons in 2022; and 379.70 million metric tons in 2023.
In 2022, coal prices reached the highest record in history. Notably, coal prices set two records this year, namely on March 2, 2022, at US$ 446 per ton and on September 5, 2022, at US$ 463.75 per ton.
The value of Indonesia’s coal exports in 2022 reached US$ 46.74 billion or the equivalent of Rp 705.39 trillion. Unfortunately, this profit is not reflected in Indonesia’s foreign exchange reserves.
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