Jakarta – The government has officially raised the Value Added Tax (VAT) rate by 1 percent, from 11 percent to 12 percent, as part of an effort to strengthen state revenues and create a more equitable taxation system. This policy is considered to have no significant impact on inflation, but has great potential to support national economic development.
Deputy Chairman of the Indonesian House of Representatives for Economic and Financial Coordination, DR. IR. H. Adies Kadir, emphasized that the decision to increase the VAT rate is a mandate of the law and a strategic step by the government to encourage economic equality. “This policy is good for the Indonesian people as a strategic step in the economic equality program and increasing state revenues. This increase also aims for equitable development and strengthening the national economy as the ideals of the President (Prabowo Subianto),” said Adies Kadir.
Furthermore, he explained that this policy directly targets groups of people with high economic capacity, especially luxury consumers. “The luxury consumer group, most of whom come from the upper class, has very high purchasing power. Thus, those who are most capable contribute more to the country,” he added. This step is considered capable of creating tax justice while significantly increasing state revenue.
In line with Adies Kadir, the General Chairperson of the Indonesian Tax Consultant Association (IKPI), Vaudy Starworld, also gave his appreciation to the VAT increase policy. He considered that this step could strengthen a fair taxation system and support the nation’s independence. “The VAT increase policy is a strategic step to strengthen a fair taxation system and support the nation’s independence. Through a transparent approach and intensive communication, this policy is expected to create a fairer business climate,” explained Vaudy.
According to Vaudy, the increase in VAT rates will not only increase state revenue but also encourage inclusive and sustainable economic development. He underlined the importance of transparency in the implementation of this policy to ensure that state revenue can be allocated effectively. “With good communication, the public will understand that the taxes they pay will come back to them in the form of better infrastructure development, education, and health services,” he added.
A number of economic observers also stated that the 1 percent increase in VAT would not have a significant impact on inflation, considering that the rate is still considered moderate compared to other countries. On the contrary, this policy will be one of the driving forces in supporting the government’s long-term development agenda.
The government hopes that this policy can be one of the solutions to cover the budget deficit while supporting the financing of various national priority programs. With the support of all elements of society, this VAT increase is believed to be able to bring a positive impact on the Indonesian economy as a whole.
The 1 percent VAT increase is not just a technical step, but part of a grand vision to create a fairer and more prosperous Indonesia. With greater contributions from the wealthy, national development can run more evenly, providing real benefits for all Indonesian people.