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TEMPO.CO, Jakarta - A total of 99,098 people have signed a petition addressed to Indonesian President Prabowo Subianto to cancel the 12 percent increase in Value-Added Tax (VAT) on the change.org page.
As seen by Tempo on Thursday, December 19, 2024 at 10:11 WIB (Western Indonesian Time), a total of 43,652 people have signed the petition today.
The petition was initiated by Bareng Warga with the title 'Government, Immediately Cancel the VAT Increase!'. They also used the hashtags #PajakMencekik and #TolakKenaikaiPPN.
The petition states that raising VAT again is a policy that can deepen people's difficulties.
They consider that the effect of this policy can increase the prices of various necessities amidst the people's economy which is not yet good.
"For example, regarding open unemployment, according to the Central Statistics Agency (BPS) as of August 2024, the figure is still around 4.91 million people. Then, of the 144.64 million people who work, the majority or 57.94 percent work in the informal sector. The number reaches 83.83 million people," the petition wrote.
They also touched on the issue of wages which are still problematic. Citing BPS data for August, since 2020 it was said that workers' wages have been getting closer to the average Provincial Minimum Wage (UMP). They also considered that UMP as a reference for a decent income is questionable.
Moreover, they also considered that the increase in VAT could affect purchasing power. Because since May 2024 purchasing power has decreased, and if VAT continues to be forced to increase, purchasing power is said to be "freefalling".
For these reasons, they then said that the Government needs to cancel the VAT increase stated in the HPP Law.
"Before the wounds of the community become even more gaping. Before online loan arrears grow and spread everywhere," the petition wrote.
Coordinating Minister for Economic Affairs Airlangga Hartarto previously said that it was not the government that determined the increase in VAT to 12 percent, but the Indonesian House of Representatives (DPR RI).
Airlangga said that the increase in VAT to 12 percent was a decision of the Indonesian House of Representatives through the ratification of Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (HHP).
The former General Chairperson of the Golkar Party said that all factions in Senayan, except the Prosperous Justice Party (PKS), agreed to the ratification of the law. The DPR ratified Law Number 7 of 2021 in a plenary session on October 7, 2021.
"So it's not the government that determines it," said Airlangga at Halim Perdana Kusumah Airport, East Jakarta, Tuesday, December 17, 2024.
Meanwhile, Finance Minister Sri Mulyani said that the implementation of 12 percent VAT will be imposed on goods and services in the luxury category. She said that so far, luxury goods and services have been consumed by wealthy people with middle to upper incomes who fall into the 9th to 10th decile categories.
"We will comb through the price groups of goods and services that fall into the premium goods and services category," said Sri Mulyani in a press conference on the Economic Stimulus Package at the Office of the Coordinating Ministry for Economic Affairs, Central Jakarta, Monday, December 16, 2024.
Sri Mulyani gave examples of several luxury goods and services that will be subject to 12 percent VAT, namely premium rice, premium fruits, premium meat (such as wagyu and kobe beef), premium fish (such as premium salmon and tuna), shrimp, and premium crustaceans (such as king crab).
Furthermore, premium education services such as expensive and international standard education services, premium or VIP medical health services, and electricity for household customers with a capacity of 3,500 to 6,600 VA.
In addition, Sri Mulyani also mentioned several types of commodities that are not subject to VAT, such as rice, meat, fish, eggs, vegetables, milk, consumer sugar, education services, health services, public transportation services, labor services, financial services, insurance services, polio vaccines, and water usage.
There are also a number of other basic commodities whose taxes remain at 11 percent, such as wheat flour, industrial sugar, and Minyakita. The government maintains the VAT rates for these three commodities by using a government-borne tax incentive policy mechanism.
Eka Yudha Saputra, Oyuk Ivani, and Andry Triyanto contributed to the writing of this article.
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