"Political Tug-of-War Over PPN 12%: PDIP‘s About-Face Raises Eyebrows
The Indonesian political landscape is abuzz with a heated debate surrounding the impending increase in Value Added Tax (PPN) to 12%, slated for 2025. The harmonization of tax regulations (HPP) law, passed in October 2021, is theLejjidad. However, the finger-pointing game has begun, with each political party trying to distance itself from the unpopular decision.
PDIP’s Rieke Diah Pitaloka recently took the floor at the DPR’s plenary meeting, urging President Prabowo Subianto to reconsider the PPN hike, even suggesting it as a New Year’s gift for the people. She proposes implementing self-assessment monitoring systems in tax management and believes that taxes can be a tool to combat corruption. Her plea has been met with mixed reactions, with some questioning PDIP’s sincerity, given their role in passing the HPP law.
Gerindra’s Wihadi Wiyanto was quick to counter, reminding everyone that the decision to raise PPN lies with the HPP law, a product of the previous DPR period, spearheaded by PDIP. He accused PDIP of having a ‘U-turn’ attitude, now asking for the government to step in. Wihadi further criticized PDIP for their role in initiating the PPN increase, now trying to distance themselves from the decision.
Sara Gerindra, Rahayu Saraswati Djojohadikusumo, added fuel to the fire, expressing her surprise at PDIP’s sudden opposition to PPN 12% when they were instrumental in its initiation during their tenure as chairs of the relevant committee. She questioned PDIP’s motives and genuine commitment to the people’s best interests.
PDIP’s Dolfie Othniel Frederic Palit attempted to deflect the blame, claiming that the HPP law is an Initiative of the Jokowi administration. He highlighted that the law, modeled after an Omnibus Bill, modifies several tax laws and introduces voluntary taxpayer disclosure and carbon tax programs. While acknowledging the government’s right to alter the PPN rate within a 5-15% range, he emphasized the need for balanced economic growth and increased welfare for the people.
As the political wrangling continues, one thing is clear: the PPN 12% increase is seemingly here to stay, barring any unexpected U-turns or political maneuvering. Only time will tell how this tax hike will affect the Indonesian economy and the people’s livelihoods.
