Sri Mulyani Says VAT Hike Being Discussed with Prabowo
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28 August 2024 17:44 WIB
TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati stated that her side is actively coordinating with President-elect Prabowo Subianto to discuss the policy of increasing the Value Added Tax (VAT) rate to 12 percent. This VAT increase is part of the ongoing discussions on the State Budget (APBN).
“We are continuously communicating and consulting with the President-elect,” Sri said at the Senayan Parliament Complex in Jakarta on Tuesday, August 27, as reported by Antara.
She explained that several aspects of the State Budget are being discussed with the President-elect's team, including both state revenue and spending. In addition to VAT, Sri mentioned that the excise policy on packaged sweetened beverages (MBDK) is also under consideration. The President-elect will announce the final decisions regarding these various programs after his inauguration.
“For policies with significant social, political, and economic implications, the President-elect will determine and announce them. We are actively coordinating on these matters,” Sri remarked.
In the previous press conference on the Draft State Budget (RAPBN) 2025 in Jakarta, Sri said that the President-elect is already aware of the policy outlined in Law No. 7 of 2021 concerning the Harmonization of Tax Regulations (UU HPP).
The HPP Law stipulates that the VAT rate, which was previously 10 percent, was increased to 11 percent on April 1, 2022, and is scheduled to increase again to 12 percent by January 1, 2025.
However, the HPP Law also allows for flexibility in the VAT rate, permitting adjustments between a minimum of 5 percent and a maximum of 15 percent.
The government aims to increase state revenue by 6.4 percent next year, targeting a total of Rp2,996.9 trillion. Of this amount, Rp2,490.9 trillion is expected to come from tax revenue. “We will assess the economic potential, tax ratio, extensification, and other relevant factors,” Sri stated.
Furthermore, Sri Mulyani emphasized that the government has implemented VAT exemption policies for certain groups, including essential goods, education, healthcare, and transportation. These incentives primarily benefit the middle to upper-class segments of society. The State Treasurer also confirmed that the HPP Law explicitly exempts basic necessities, education, healthcare, and transportation from VAT.
ANTARA
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