PDIP's Said Abdullah: 12% VAT to Support Prabowo's Key Programs

December 24, 2024 | 12:53 pm

TEMPO.CO, Jakarta - Said Abdullah, the Chairperson of the Central Leadership Council (DPP) of the Indonesian Democratic Party of Struggle (PDIP), expressed full support for the implementation of the 2025 State Budget (APBN), specifically concerning the implementation of a 12 percent Value Added Tax (VAT). The PDIP believes that the increase in the VAT rate will support the acceleration program, or "quick wins," of President Prabowo Subianto's administration.

Said said that discussions regarding the 2025 State Budget between the government and the House of Representatives (DPR) had resulted in an agreement on the state revenue target, based on the assumption that the implementation of the 12 percent VAT is intended to support Prabowo in achieving his strategic programs.

These programs include for example Free Nutritious Meals which require approximately Rp71 trillion; Free Health Check-ups, Rp3.2 trillion; Construction of Complete Hospitals in the Regions, Rp1.8 trillion; examination of infectious diseases (TB), Rp8 trillion; School Renovation, Rp20 trillion; Integrated Leading Schools, Rp2 trillion; and National, Regional, and Village Food Barns, Rp15 trillion.

In a working meeting between the coordinating ministries for food and the DPR budget agency on December 2, 2024, it was also conveyed that the government is targeting rice self-sufficiency for that year.

“Thus, the above programs are actually in line with the PDIP agenda to improve the quality of Human Resources (HR), as well as encourage inclusive health programs,” he said in a written statement on Tuesday, December 24, 2024.

PDIP, Said explained, is committed to overseeing and ensuring the success of the aforementioned Quick Win Program through support for the 2025 APBN. In the same statement, Said alluded to the mutual criticisms exchanged between political groups regarding the plan to increase VAT from 11 percent to 12 percent.

“We see that this is leading to a counterproductive situation. In fact, we need the energy of this nation to unite, to face the economic challenges of 2025 which are not easy,” said the Chairman of the DPR Budget Committee.

Said then emphasized that the VAT increase was not a sudden development. Prior to April 1, 2022, the VAT rate was 10 percent. Following the enactment of Law No. 7 of 2021, the VAT rate was adjusted to 11 percent as of April 1, 2022, and is scheduled to become 12 percent on January 1, 2025.

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