1 month ago
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December 31, 2024 | 11:13 am
TEMPO.CO, Jakarta - Director of the Center of Economic and Law Studies (Celios) Mhd. Zakiul Fikri proposed that Indonesian President Prabowo Subianto issue a government regulation in lieu of law (perpu) to cancel the 12 percent increase in value added tax (VAT). The reason is, there are many demands voicing rejection.
Zakiul said, if former President Jokowi could issue a perpu to accommodate the needs of the rich, President Prabowo could do the same. Issue a perpu to accommodate the needs of the community, especially the lower middle class.
"This is the time for Prabowo to leave Jokowi's shadow, by issuing a perpu to cancel the 12 percent increase in the VAT rate in the HPP Law and it's time to side with the lower middle class," he said in a written statement received by Tempo on Wednesday, December 25, 2024.
According to him, the VAT rate can be changed according to the Tax Regulation Harmonization Law (HPP Law). The rate can be lowered to 5 percent or a maximum increase of 15 percent. Over the past 10 years, he said, the existence of perpu in Indonesian politics is not uncommon. For example, Perpu Number 1 of 2017 concerning Tax Interests. This Perpu was made to accommodate the tax amnesty plan.
The 12 percent increase in VAT rates will be enforced as of January 1, 2025. Coordinating Minister for the Economy Airlangga Hartarto said that the increase in VAT rates to 12 percent is a mandate of Law Number 7 of 2021 concerning Harmonization of Tax Regulations.
The 12 percent VAT increase policy has received a lot of rejection, one of which is through a petition on the Change.org page. As of Tuesday, December 31, 2024, the petition initiated by Bareng Warga has been signed by 200,313 people.
The initiator of the Bareng Warga group, Risyad Azhar, emphasized that he would continue to gather as many residents as possible and ask for public participation to reject the 12 percent VAT policy. "Consolidation with many parties continues to be carried out leading up to January 1 and afterward," said Risyad when contacted on Tuesday, December 24, 2024.
Risyad said the Bareng Warga group prepared a boycott plan and guidelines when facing cost increases if the 12 percent VAT is still implemented. In addition, the Bareng Warga legal team is also preparing a judicial review to the Constitutional Court (MK) of the HPP Law to be reviewed again, especially the 12 percent VAT policy.
Daniel Ahmad Fajri and Yudono Yanuar contributed to writing this article.
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