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Former Finance Minister Sri Mulyani Urges Reduced PPN Rate to 12%

by Chief Editor
written by Chief Editor

Title: GNB Urges Government to Reconsider PPN 12% Hike, Citing Marginalized Middle Class

Jakarta, CNN Indonesia — The Gerakan Nurani Bangsa (GNB) has called upon the government not to burden the middle and lower-middle classes with a hike in the Value Added Tax (PPN) to 12% starting in 2025. This appeal was made by GNB’s Lukman Hakim Saifuddin to Minister of Finance Sri Mulyani at a meeting held on Friday evening.

In the meeting, Lukman and the GNB criticized the government’s policy, which they believe further squeezes the purchasing power of the middle class, particularly those vulnerable to post-pandemic economic impacts. "The middle class is already heavily burdened. There are mass layoffs, income cuts, and rising costs of living. A plan to increase PPN to 12% will only worsen their condition," Lukman said in a virtual press conference on Saturday.

He argued that such a policy not only reduces consumer spending but also affects the consumption sector, which is a significant driver of the Indonesian economy. Besides the PPN increase, Lukman also highlighted other planned measures such as the hike in BPJS Kesehatan premiums and the Tapera program, which could potentially increase the burden on the public.

Lukman urged Sri Mulyani to reevaluate the fiscal policies implemented and encouraged the government to be more careful in its decision-making, especially those directly related to the purchasing power of the masses. "The government must formulate policies that are fair to the middle and lower-middle classes. This is not only about being fair but also about maintaining long-term economic stability," Lukman stated.

It isknown that the government under President Prabowo has confirmed plans to increase the PPN rate to 12% starting January 1, 2023. This move is part of the implementation of Law No. 7/2021 on the Harmonization of Income Tax Laws, which was enacted during the Jokowi administration.

Citing Sources: (tst/asa)

[Video]: [Gambar: Video CNN]

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Rolls-Royce: How Much for the Lucky Winner’s Lottery Prize After All?

by Chief Editor
written by Chief Editor

Exclusive: Rare Rolls-Royce Phantom Due for Relisting, sparking Anticipation for Lelang’s Return

In an unprecedented twist, a luxurious Rolls-Royce Phantom, previously grounded in the Ministry of Social Affairs (Indonesia's Ministry of Social Affairs Baggingliong Rp 150 Million Annually from 'Free Gift Draw' Contributions".”>Kemensos) warehouse, is set to hit the auction block again. Speculations are rife as to its potential resale value. Minister of Social Affairs Saifullah Yusuf, or ‘Gus Ipul’, shed light on the subject during an interview last Saturday.

"The value of this Rolls-Royce will be determined by the Indonesian State Revenue Office and Auction Service (KPPN-KL) in Serang, which falls under the Directorate General of State Assets (DJKN)", he stated. "The proceeds from the sale will go towards state coffers, ultimately supporting various social welfare programs. We’ve been following this procedure for quite some time."

Initially listed in 2021 during the tenure of Tri Rismaharini, the high-end automobile failed to find a buyer. Now, Kemensos plans to resubmit it for auction in 2025, alongside gold and precious metals currently in storage.

The Rolls-Royce Phantom, a British production masterpiece, was procured through an airline lotteriesystem. The winning ticket holder, however, could not afford the sizeable redemption fee, which amounts to a quarter of the car’s market value. Presently, a new Rolls-Royce unit can be priced between Rp 20-25 billion, translating to a redemption fee of Rp 5-6.25 billion, a hefty sum for mere mortals.

As the anticipation builds, so does the intrigue surrounding this rare chance to own a slice of automotive history. With the government’s newfound initiative to re-auction these luxurious assets, it remains to be seen how the market will respond. Will the Rolls-Royce Phantom fetch a price that reflects its prestige, or will its previous lack of buyers set a new precedent for luxury auctions in Indonesia? Only time will tell.

(taa/dhn)

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President Jokowi Finally Speaks Out on the 12% PPN Increase Effective January 1, 2025

by Chief Editor
written by Chief Editor

President Jokowi Confirms 12% Value Added Tax (PPN) Increase, Effective January 1, 2025

Jakarta, CNN Indonesia — President Joko Widodo (Jokowi) has finally broken his silence on the upcoming increase in Value Added Tax (PPN), which will rise to 12% starting January 1, 2025.

Jokowi stated that the tax hike has already been officially set by law, a product of bipartisan efforts between the House of Representatives (DPR) and the government. Therefore, the government is obligated to implement it, as it is bound by the law.

"We’re talking about a harmonization of tax regulations, which has already been approved by the DPR. The government is obligated to carry it out," said Jokowi on Friday (27/12), according to a report by detik.com.

The President assured that the PPN increase has been thoroughly considered. "The government has done its calculations and made thorough considerations. I believe we should support the government’s decision. The government’s decisions have been carefully considered, and they align with the dictates of the law," Jokowi explained.

Jokowi also mentioned that the government has analyzed the potential impact of the tax increase on the public. "Of course, the government has already conducted calculations and made considerations to mitigate these impacts," he said.

The Jokowi administration has confirmed that PPN will indeed increase to 12% starting January 1 next year. This decision is a result of the ratification of Law No. 7/2021 on the Harmonization of Tax Regulations (HPP) under the Jokowi administration.

The impending PPN increase has sparked public backlash, with citizens signing a petition titled "Government, Immediately Revoke the PPN Increase!" to urge President Prabowo Subianto to rescind the 12% PPN.

As of Wednesday (25/12), the petition had gathered over 1.93 million signatures.

(agt/agt)

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Unraveling Rolls-Royce’s Abandoned Lottery Program at Indonesia’s Kemensos Warehouse

by Chief Editor
written by Chief Editor

Headline:
Abandoned Rolls-Royce Ghost in Government Warehouse: A Tale of Luxury and Neglect

Subheading:
Unused since 2016, the luxury car sits idle as bureaucracy delays its sale.

Article Body:

In the heart of Jakarta, nestled within the premises of the Ministry of Social Affairs, an unusual sight catches the eye: a Rolls-Royce Ghost, dormant and untouched, gathering dust in a government warehouse. This isn’t a case of extravagant government spending; rather, it’s a tale of a prize gone unclaimed and bureaucratic red tape delaying its sale.

The Rolls-Royce, a silver masterpiece with blacked-out B-pillars, is a 2012 Ghost model. It was initially a grand prize in a lottery by an airline. When the winner couldn’t be found, the airline handed over the car to the Ministry of Social Affairs in 2016. Since then, the luxury sedan has been left to fade into obscurity in the ministry’s garage.

The car, a testament to British craftsmanship, boasts a 6.6-liter twin-turbo V12 engine, delivering 562 horsepower and 780 Nm of torque. Paired with an 8-speed automatic transmission and rear-wheel drive, it promises a thrilling drive, if only it ever left the warehouse.

The car made headlines briefly in 2021 when Minister Tri Rismaharini attempted to auction it off. However, it failed to find a buyer, leaving the Rolls-Royce to gather more dust and politically charged whispers.

In December 2024, the current Minister of Social Affairs, Saifullah Yusuf or Gus Ipul, reignited the controversy. He revealed that the winner of the lottery couldn’t afford to claim the car. According to him, the winner would have to pay a quarter of the original price, amounting to a hefty sum of at least Rp 5 billion, given today’s market prices.

Ipul hinted that the ministry could use the funds from the car’s sale to support social programs. "The money will be used to help those in need, perhaps for clean water projects or housing," he said.

As the Rolls-Royce Ghost continues to collect dust, the ministry struggles to find a balance between recuperating funds and making sure the sale doesn’t become a political liability. Meanwhile, the car, a symbol of luxury and neglect, remains a poignant reminder of the peculiarities of government bureaucracy.

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Cash Usage Set to Surge Again

by Chief Editor
written by Chief Editor

Java-Based QRIS Payments to See 12% Value Added Tax Increase in 2025

The Indonesian government has officially announced a rise in Value Added Tax (VAT) on Java-based Quick Response Code Indonesian Standard (QRIS) payments, effective January 1, 2025. This shift will impact transactions conducted using the country’s popular QR code standard.

Until now, VAT has primarily targeted certain sectors. However, this new policy introduces a 12% VAT on QRIS-based transactions, a change that has sparked conversation and concern among economists.

Professor Dr. Rahmat Setiawan, SE, MM, from the Faculty of Economics and Business at Airlangga University (FEB Unair), believes the increased VAT on QRIS transactions could lead consumers to revert to cash payments. "If QRIS transactions are subject to a 12% VAT, customers may opt for cash again. Why choose QRIS if it ultimately attracts a higher VAT?" he explained.

Prof. Setiawan condemns the government’s decision to impose a 12% VAT on QRIS transactions, stating that it contradicts their efforts to promote non-cash transactions. "The government encourages non-cash transactions to boost economic growth and combat money laundering," he pointed out, referring to the government’s and Bank Indonesia‘s joint campaign to increase non-cash transactions.

Moreover, the economist predicts that this VAT increase could impact daily necessities and potentially contribute to unemployment. "Items like deodorant, toothpaste, and soap aren’t just luxuries; they’re daily essentials, and now they’re subject to a 12% VAT," he stated. He also expressed concern that a decrease in consumption due to the increased VAT could lead to job losses.

Prof. Setiawan urges the government to reconsider or postpone the VAT hike, suggesting they could use their existing authority to cap the VAT at 11% without amending the law. "The government can lower or raise the VAT to a maximum of 15% without changing the law," he concluded.

jar/tjh

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Mystery posebno: Ada Rolls-Royce and Gold Bared in Warehouse – Whose Is It?

by Chief Editor
written by Chief Editor

Headline:
Unclaimed Luxury Car and Gold Bars: Unresolved wins from Free Lottery Draws at Ministry of Social Affairs

Article:

In an unexpected revelation, Indonesian Minister of Social Affairs, Saifullah Yusuf, also known as Gus Ipul, recently disclosed the existence of unclaimed prizes from free lottery draws held under his ministry. One of the most significant findings is a high-end Rolls-Royce car parked in the ministry’s warehouse, part of an unsolved lottery draw.

The Rolls-Royce, valued at approximately Rp 20-25 billion (USD 1.4-1.8 million), is a result of a free lottery draw where the winner is required to pay a quarter of its price, about Rp 5-6.25 billion (USD 0.35-0.45 million), to redeem the prize. However, the winner has been unable to meet this financial obligation, leaving the luxurious car unstolen for some time.

"We have a Rolls-Royce here, no one has bought it yet," Gus Ipul revealed in a recent event, adding that the winner was unable to pay the required 25% of its price, leaving the ministry with a sitting duck worth millions of rupiah.

The issue isn’t limited to the Rolls-Royce. There’s also an unclaimed gold bar, also a result of a free lottery draw with an equally hefty price tag for redemption. The winner, too, couldn’t afford the price, leaving the gold bar untouched.

Although these prizes remain unclaimed, Minister Yusuf assured that the process aligns with Law No. 22/1954 regarding lotteries. The funds collected from these redemption prices will go towards social welfare programs such as improving access to clean water and building houses for the underprivileged.

In a digital age, these unclaimed prizes serve as a intriguing tale, a testament to the vast chasm between the riches and the less fortunate in Indonesian society. It also shines a spotlight on questions about the fairness and practicality of such lottery draws in social welfare programs.

Meanwhile, the Rolls-Royce and the gold bars wait in their respective warehouses, symbols of wealth in a context quite removed from their typical niches of luxury and opulence.

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Recipients of the Pulled KJP Plus and KJMU Grants to be Reinstated: Funds to Begin Disbursement in 2025

by Chief Editor
written by Chief Editor

Headline:
Thousands of Poverty-Stricken Jakartans to Have Education Stipends Unfrozen; DPRD Vows Oversight

Subhead:
Disdukcapil Jakarta to reissue 105,960 KJP and KJMU cards frozen in phase II 2024; Komisi E DPRD set to monitor funds

Article:

The Jakarta Regional Education Board (Disdik) has announced plans to reinstate 105,960Keyboard Jobber (KJP, a cashless card for school supplies) and Keyboard Jaminan Mutu (KJMU, a cashless card for school fee discounts) cards that were temporarily suspended during the phase II 2024 selection process. Komisi E of DKI Jakarta’s Provincial Legislative Council (DPRD) will oversee the disbursement of funds for these reinstated cards.

Dina Masyusin, a Komisi E DPRD member, reported the development, stating that Disdik has committed to unlocking the funds by January 2025. "We’ll give Disdik until January 2025 to release the funds. If they don’t, we’ll summon them for explanation," she said, as quoted by Antara on December 25, 2024.

Many phase II 2024 hopefuls have been eagerly awaiting the disbursement of their education stipends. However, as the year draws to a close, many pre-sejahtera (low-income) Jakartans are still waiting for their assistance. Dina criticized the unilateral termination of KJP and KJMU beneficiaries based on joint verification by Disdukcapil and the Regional Revenue Board (Bapenda), citing the reason as the beneficiaries already owning a four-wheeled vehicle or assets exceeding Rp1 billion in sales value.

"(They) are barely making ends meet in Jakarta. How could they own a car or assets worth more than Rp1 billion?" Dina questioned. She advised Disdukcapil, Bapenda, and the Social Welfare Department to meticulously verify KJP and KJMU beneficiaries’ documents and living conditions to prevent recurrences that might hinder them from receiving government assistance.

Previously, Komisi E DPRD had agreed with Disdukcapil to reinstate KJP Plus and KJMU recipients who were removed from the list. Many applicants are still deemed eligible for the two social assistance programs. A total of 105,225 KJP Plus and 735 KJMU applicants were removed during the phase II 2024 verification process, with some applicants turning to DPRD Jakarta for support.

Muhammad Thamrin, Chairman of Komisi E DPRD, assured that the status of KJP Plus and KJMU cards that were previously revoked due to data discrepancies and phase II 2024 verification issues would be reinstated by early January 2025. The decision was made collectively to ensure that Jakarta residents have access to quality education. The allowance for KJP Plus recipients is as follows:

  • SD/MI: Rp250,000/month, with an additional Rp130,000/month for private school tuition fees
  • SMP/MTs: Rp300,000/month, with an additional Rp170,000/month for private school tuition fees
  • SMA/MA: Rp420,000/month, with an additional Rp290,000/month for private school tuition fees
  • SMK: Rp450,000/month, with an additional Rp240,000/month for private school tuition fees
  • PKBM (Community Learning Centers): Rp300,000/month
  • KJMU for university students: Rp9 million per semester

(Source: Antara, DPRD DKI Jakarta)

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Prabowo Urges Reversal of PPN Hike to 12%, Here’s How to Make It Happen

by Chief Editor
written by Chief Editor

** området

Widespread protest and a petition signed by nearly 200,000 people have been sparked by plans to increase Value Added Tax (VAT) to 12% starting in 2025. The move, stipulated in Law No. 7 of 2021, or the Law on Tax Organization Harmonization (HPP), has drawn fierce opposition from citizens who argue that it will disproportionately impact lower-income individuals and stifle economic recovery.

The Indonesian government, however, has stood firm, stating that the VAT increase is crucial for balancing the state budget and that several stimulus packages are in place to maintain household purchasing power temporarily. Nevertheless, demands to revoke the VAT increase remain loud and clear.

legal expert weighs in

Mhd Zakiul Fikri, the director of Hukum at the Center of Economic and Law Studies (Celios), believes that the government should swiftly reconsider the VAT hike due to the overwhelming backlash. He presents several scenarios that could alleviate the situation:

  1. Adjusting the VAT rate: As stipulated in the HPP Law, the VAT rate can be adjusted between 5% and 15%, providing a range of possibilities for review and reduction.

However, Zakiul notes that the current legal framework may cause confusion, as the criteria for determining the 5% to 15% range are ambiguous. Moreover, any changes would require joint implementation with the House of Representatives (DPR), which could prove to be a lengthy and complex process, given the approaching deadline of January 2025.

CALL FOR AN EMERGENCY REGULATION

Given these challenges, Zakiul proposes that President Prabowo Subianto initiate an emergency regulation, or Peraturan Pemerintah Pengganti Undang-Undang (Perppu), to circumvent the impending VAT increase. He argues that Perppu has been employed in the past, including by President Joko Widodo (Jokowi) in 2017, to address urgent fiscal matters.

A RARE SHOW OF UNITY

Unusually, Zakiul’s recommendation aligns with that of Hadi Poernomo, a former director-general of taxation at the Ministry of Finance and former chairman of the Supreme Audit Agency (BPK). Hadi also urges the government to revoke the VAT increase, citing its potential impact on low-income households and small businesses. He suggests that the VAT rate could be reverted to 10% through another decree.

The backdrop to this debate is a looming budget crisis. According to the 2025 State Revenue and Expenditure Budget, the government’s reliance on VAT for revenue has surged to 43.2%, raising concerns about the potential consequences of lowering the VAT rate.

Alash, the inevitable?

As the clock ticks down towards January 2025, the debate over the VAT increase continues to intensify. With the DPR currently in recess until mid-January, the focus turns to the government and President Prabowo to address the potential economic fallout of this contentious fiscal policy.

(End/rrd)

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Understanding the 12% PPN on Rice: A Guideline for Consumers

by Chief Editor
written by Chief Editor

Headline: Indonesia Spared From New PPN Rate; Rice Among Exempted Commodities

Subheading: National Food Agency (NFA) assures consumers that staple food items, including locally produced rice, will not bear the increased 12% PPN rate.

Article:

In a recent announcement, the National Food Agency (NFA) has clarified that Indonesia’s staple food items, particularly locally produced rice, will not be subject to the impending 12% Pajak Pertambahan Nilai (PPN) tax increase. The new PPN rate, set to take effect in 2025, will not apply to strategic food commodities, as confirmed by NFA Head, Arief Prasetyo Adi.

"We understand the significance of rice in Indonesia’s dietary landscape and have ensured that it remains exempt from the PPN increase," Adi explained in a written statement, obtained on Wednesday (25/12/2024).

The exemption extends to locally produced rice, including special varieties like aromatic rice. However, imported rice like the premium ‘Shirataki’ from Japan will be subject to the increased 12% PPN rate, as confirmed by Coordinating Minister for Food Zulkifli Hasan (Zulhas). This is to ensure that the increased tax burden falls primarily on luxury or imported goods, rather than basic commodities.

The NFA has submitted a proposal to the Ministry of Finance, suggesting that the 12% PPN rate should only apply to specific imported rice varieties that are not produced domestically. This stance aligns with the regulations outlined in Peraturan Badan Pangan Nasional (Perbadan) No. 2/2023, which categorizes rice into ‘prime’ and ‘medium’ variants based on their degree of wholesomeness and broken kernels.

"Rice, particularly premium varieties, is widely consumed and distributed across all market sectors," said Adi. "The government is taking steps to ensure it is not classified as a luxury good, thereby avoiding increased PPN charges."

PPN is a form of value-added tax that is levied on goods and services in Indonesia. The 1% increase, from 11% to 12%, is expected to generate additional state revenue while maintaining Indonesia’s competitiveness in the global market.

Citations: (rrd/rrd)

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Improved Title: "Prabowo’s Alternative: Slash Tax in This Sector, Not Boost PPN"

by Chief Editor
written by Chief Editor

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

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