Jerome Polin Says 12% VAT Means 9% Tax Hike; Airlangga: That's Miscalculation

December 24, 2024 | 11:29 am

TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs Airlangga Hartarto responded to a calculation stating that the increase in Value Added Tax (VAT) from 11 to 12 percent equates to a 9 percent increase. This figure was derived from the percentage increase in the nominal tax paid by consumers.

“That's a miscalculation. The increase is only 1 percent,” said the former General Chairperson of the Golkar Party briefly to reporters in Tangerang, Banten, on Sunday, December 22, 2024.

The analysis of the 9 percent nominal tax increase was presented by social media influencer Jerome Polin. In a post on his personal Instagram account on Friday, December 20, 2024, he explained that the calculation of the tax increase should focus on the nominal tax amount, rather than the overall price of an item.

Jerome provided an example: with an 11 percent VAT, consumers pay Rp11,000 in tax on goods worth Rp100,000. However, with a 12 percent VAT, the tax paid becomes Rp12,000. “The increase is an additional Rp1,000,” he stated.

From this perspective, the increase in tax paid appears to be only Rp1,000. However, Jerome emphasized that the price of the goods remains constant. The only change is in the tax amount. Therefore, when calculating the tax increase, only the tax itself should be considered—not the total price of the goods.

The content creator known for sharing educational math content on social media then calculated the percentage increase in the nominal tax paid by consumers relative to the original nominal tax. “Rp1,000 divided by Rp11,000 multiplied by 100 percent, which, when calculated, is around 9.09 percent or rounded up to 9 percent,” explained Jerome Polin.

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