Headline: Indonesia‘s PPN Hike Sparks Opposition, Alternatives Proposed
Subhead: Government plans to increase Value Added Tax (PPN) to 12% in 2025, but critics argue there are more equitable revenue-raising strategies.
Indonesia’s government is considering a boost in Value Added Tax (PPN) from 11% to 12% starting 2025, as per the latest Harmonization of Tax Regulations Law (1/2021). The Ministry of Finance projects an additional Rp 75 trillion in state revenue. However, the proposed hike has sparked controversy, with concerns ranging from increased consumer prices to decreased purchasing power.
Proponents argue that the PPN increase could bolster state coffers, but critics contend that the government could explore more progressive tax strategies. According to a Center for Economic and Legal Studies (Celios) report, there are alternative revenue-raising measures that could be more equitable.
Celios suggests taxing the wealthy by targeting their substantial assets in Indonesia. This approach could potentially generate Rp 81.6 trillion in revenue for the country. Additionally, the government can consider imposing a carbon tax, an idea that has been on the table for years. If implemented effectively, this could bring in up to Rp 69 trillion.
The government can also tap into windfall profits from commodities like coal, which could potentially yield Rp 47 trillion. Progressively reforming corporate income tax and closing tax loopholes in the digital and palm oil sectors could also help maximize revenue.
"These measures are not only more equitable but also less likely to strain lower-income families," the Celios report argues.
Celios’s legal director, Mhd Zakiul Fikri, suggested that President Prabowo Subianto could reconsider the PPN hike and explore these alternatives. He pointed out that previous governments had used Presidential Regulations in Lieu of Laws (Perppu) to make regulatory changes.
Meanwhile, the move to increase PPN has generated widespread public debate, with concerns around burdening consumers and reducing purchasing power. The government maintains that it is committed to treasury expansion, but critics contend that alternative revenue-raising strategies are available and more forthcoming.
Keywords used for SEO: Indonesia, PPN, Value Added Tax, tax hike, tax revenue, tax alternatives, equitable taxation, Celios, Mhd Zakiul Fikri, presidential regulations
Internal linking opportunities: Previous articles on Indonesia’s tax policy, Celios and its reports, President Prabowo Subianto
External linking opportunities: Government official statements, Celios reports, relevant news outlets covering the topic
