JAKARTA — The Prabowo Subianto and Gibran Rakabuming Raka administration has demonstrated a strong commitment to people’s welfare through a policy of adjusting the Value Added Tax (VAT) rate by 1 percent.
The policy is believed to bring great benefits back to the community in the form of development and social empowerment.
Director of Counseling, Services, and Public Relations of the Directorate General of Taxes, Dwi Astuti, emphasized that the results of the VAT adjustment policy have been utilized for various strategic programs.
The programs include Direct Cash Assistance (BLT), Family Hope Program (PKH), Food Cards, as well as the Smart Indonesia Program (PIP) and Smart Indonesia Card (KIP) for College.
In addition, subsidies for electricity, 3 kg LPG, fuel, and fertilizer are also felt by the wider community.
“In 2023, the government allocated Rp 269.59 trillion for social assistance and subsidies. All of that comes from taxes collected for the benefit of the people,” said Dwi
Minister of Finance, Sri Mulyani Indrawati, added that taxes, including VAT, are an important instrument in development.
In a press conference entitled “Economic Stimulus Package for Welfare” in Jakarta, he explained that the VAT policy is based on the principles of justice and mutual cooperation.
“Justice is seen from how people are able to pay taxes according to their obligations, while groups who are unable to do so receive protection and assistance.
“This principle reflects the presence of the state in supporting its citizens,” said Sri Mulyani.
He also highlighted the VAT exemptions for basic necessities, education and health services that remain in place.
In contrast, tariff adjustments only apply to luxury goods, such as premium food, VIP services, and international standard education.
“The results are used to support various social programs that are mostly enjoyed by lower-middle class households,” he said.
Deputy Speaker of the Indonesian House of Representatives, Adies Kadir, also supports this policy.
He assessed that the 1 percent VAT adjustment was in line with President Prabowo Subianto’s ideals for equitable development.
“This increase is applied to luxury goods consumed by the upper class. Thus, those who are able to make a greater contribution to the country,” Adies explained.
He also added that taxes from this wealthy group would be used to fund social programs that strengthen the people’s economy.
The 1 percent VAT adjustment policy not only supports national development, but also ensures that its benefits are felt by the wider community. (*)
