Adjustment of VAT Rates is a Solution for Funding National Development and Economic Equality
By: Aryo Setiadi )*
The Value Added Tax (VAT) adjustment policy in 2025 is one of the government’s strategic efforts to strengthen national development funding. This step was taken with the aim of increasing state revenue, which is very necessary to support various government programs that focus on public welfare, improving infrastructure, and strengthening other economic sectors.
The government hopes that with this VAT rate adjustment, potential state revenues can increase to Rp75.29 trillion, which can be allocated to vital sectors such as education, health, and social protection.
Although this policy aims to strengthen the state budget, the government also pays serious attention to protecting vulnerable groups in society, especially those with low incomes or working in labor-intensive sectors.
Minister of Manpower, Yassierli, emphasized that the VAT adjustment policy will be balanced with various incentives to protect workers and affected communities. Programs such as Income Tax (PPh) Article 21 Borne by the Government (DTP) for workers with incomes of up to IDR 10 million per month, as well as Work Accident Insurance (JKK) discounts for labor-intensive sectors, are expected to ease the burden on the community and the business sector.
Not only that, the government has also prepared food aid and subsidies for the housing sector, in addition to incentives in the automotive and housing sectors which will have a positive impact on employment.
The government also focuses this policy to create a balance between state revenue collection and social protection. In addition to fiscal incentives, the government has designed various social programs that support underprivileged groups.
In this regard, the Minister of Manpower emphasized that this policy is driven by the principle of justice, where groups of people who are able will pay higher taxes, while those who are unable will be protected by assistance programs.
The housing and automotive sectors are also an important part of this policy. The government provides a VAT discount for home purchases with prices of up to IDR 5 billion and provides incentives for battery-based electric motor vehicles (KBLBB). This is expected to support the growth of the housing sector and create new jobs, while reducing the negative impact on people’s purchasing power.
Deputy for Macroeconomics and Finance of the Coordinating Ministry for Economic Affairs, Ferry Irawan, emphasized that this incentive was designed by considering the needs and characteristics of the middle class, and is expected to encourage the growth of sectors that have the potential to create jobs.
In this regard, the Indonesian Tax Consultant Association (IKPI) also showed its support for the VAT rate adjustment policy. Head of the IKPI Fiscal Policy Research and Assessment Department, Pino Siddharta, said that this VAT rate adjustment is an important step to strengthen Indonesia’s taxation system.
IKPI, which has 42 branches throughout Indonesia, is committed to educating and socializing this policy to its members and taxpayers throughout the country. Pino explained that this socialization aims to provide a clear understanding that the VAT rate adjustment has been set and must be implemented, despite the challenges in its implementation.
Pino also highlighted that the facilities or assistance accompanying the VAT rate adjustment need to be expanded in scope. According to him, assistance should not only be given to poor communities, but also to workers in other sectors affected by this policy.
IKPI hopes that the government can anticipate negative impacts that may arise, such as increased poverty due to the additional burden of the increase in VAT, so that the reach of assistance can cover more levels of society.
Pino hopes that the adjustment of the VAT rate can encourage improvements in the tax structure in Indonesia. By increasing state revenue through more optimal VAT receipts, the government can create a fairer business climate and provide opportunities to improve the public service system.
Pino also added that the implementation of the “Coretax” application, which connects taxpayer transactions with the Employee Identification Number (NIK) or KTP number, can increase transparency and efficiency in the taxation system. Thus, the Directorate General of Taxes (DJP) will have wider data access to conduct tax supervision and improve taxpayer compliance.
With these steps, the government is trying to maintain a balance between optimal state revenue and public welfare. The adjustment of the VAT rate is not only aimed at increasing state revenue, but also to supportg sustainable development and improving the quality of life of all levels of society.
The government is also committed to ensuring that this policy does not burden vulnerable communities and will continue to evaluate the impact of this policy to ensure that development goals are achieved.
Overall, the adjustment of VAT rates is an important step that needs to be supported by all elements of society. With cooperation between the government, society, and the private sector, it is hoped that this policy can increase more optimal state revenues and create a fairer, more transparent, and more efficient taxation system.
)* The author is a contributor to Persada Institute
