By: Rivka Mayangsari*)
Increasing state revenue through the taxation sector is one of the important efforts in creating sustainable economic development. In this context, the Indonesian Government through policies regulated in the Law on Harmonization of Tax Regulations (HPP) seeks to increase state revenue for the prosperity of the people. One of the controversial policies that needs attention is the plan to increase the Value Added Tax (VAT) rate which will have a direct impact on the welfare of the community.
The VAT rate from 10 percent to 11 percent, and possibly to 12 percent in 2025, has been approved by the DPR. Chairman of Commission XI of the DPR RI, Misbakhun, said that this policy is part of the government’s efforts to increase state revenues in order to strengthen the economic sector and expand social programs provided to the community. The increase in the VAT rate will undeniably have an impact on the increase in the price of certain goods and services. However, this policy is a strategic step needed to create a larger state revenue base, which will ultimately support the financing of social programs.
Tax revenues obtained from this policy not only flow to the interests of the state, but are also reallocated to various social programs that directly benefit the people. Dwi Astuti, Director of Counseling, Services, and Public Relations of the Ministry of Finance’s Directorate General of Taxes, emphasized that tax revenues will be returned to the community through various forms of social assistance. The Direct Cash Assistance Program (BLT), Family Hope Program (PKH), Food Cards, Smart Indonesia Program (PIP), Smart Indonesia Card (KIP) for College, as well as electricity subsidies, 3 kg LPG, fuel, and fertilizer, are some examples of how funds obtained from taxes are used to help people in need.
In addition, Dwi also emphasized that not all goods will be subject to VAT. Basic necessities such as rice, corn, soybeans, meat, eggs, and vegetables are included in the category of goods that are exempt from tax. Thus, people who rely on basic goods for their daily lives will not feel the additional burden of the increase in VAT rates.
Increasing state revenue through taxes is also not only aimed at improving the social sector, but also to maintain overall economic stability. Minister of Trade, Budi Santoso, emphasized that the government through the Ministry of Trade has prepared various programs to maintain stable purchasing power. One of the main programs emphasized is securing the domestic market, which aims to maintain the stability of staple food prices and the availability of goods.
In an effort to maintain people’s purchasing power, the government will improve domestic trade facilities and strengthen the trade supervision system. In addition, various programs related to product development and certification are also being pursued so that the quality of goods traded in the market can compete both nationally and internationally. This certainly provides a guarantee for the community to obtain goods at affordable prices and with quality.
In addition to maintaining domestic market stability, the government is also focusing on expanding export markets to increase state revenues. International trade diplomacy will be strengthened, and export promotion and information will continue to be expanded to help domestic products penetrate the global market. The MSME development program is also a priority, with a focus on the “BISA” (Dare, Innovation, Ready, Adaptation) program, which aims to create new exporters from among Indonesian MSMEs.
This program also aims to increase the competitiveness of Indonesian products in the international market through design innovation and product quality improvement. With more products being exported, there will certainly be an increase in income that can be used again to support people’s welfare programs.
Overall, the policy of increasing VAT rates in the Law on Harmonization of Tax Regulations (HPP) is a strategic step to increase state revenue. The revenue is then allocated to social programs that provide direct benefits to the people, such as social assistance, subsidies, and economic empowerment programs. In addition, this policy also aims to maintain economic stability, expand export markets, and empower Indonesian MSMEs.
Although there is a potential increase in the price of goods due to the increase in VAT rates, the benefits provided to the community through various forms of subsidies and social programs are proof that this policy will ultimately benefit the people. Therefore, increasing state revenue through taxes is not only to meet the needs of the state, but also to ensure that the welfare of the people is maintained and develops along with the progress of the country’s economy. Tax revenue is not only an obligation, but also an important pillar in realizing national progress. With transparent and efficient tax management, every rupiah collected will be used to accelerate infrastructure development, improve the quality of education, and ensure a more equitable and quality health system. Therefore, we need to support this tax policy as part of our contribution to a better future.
)* Economic Observer