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Prabowo, Sri Mulyani’s Dual Perspectives on the 12% PPN

by Chief Editor
written by Chief Editor

Presidential Announcement: PPN Increase to 12% Affects Only Luxury Items

In a significant move, President Prabowo Subianto has decided to enforce an increase in the Value Added Tax (VAT) rate from 11% to 12% only for luxury items,ercising a restraint that satisfies the spirit of Law No. 7/2021 regarding the Harmonization of Fiscal Laws.

Targeted Items: Barang Mewah

The president clarified that the VAT increase will apply solely to luxurious goods and services, specifically those currently classified as Barang Mewah, or luxury goods, that are consumed by the wealthy. Items that qualify include:

  1. Luxury vehicles, such as private jets
  2. High-end watercraft like yachts
  3. Upscale residential properties with prices exceeding Rp30 billion

Minister of Finance Sri Mulyani also detailed the specific luxury items affected, which include:

  • High-end housing, such as luxury homes, apartments, and townhouses
  • Luxury aircraft and watercraft, like helicopters and yachts
  • Expensive weapons and ammunition
  • Luxury goods and services

No Impact on Essential Commodities

President Prabowo echoed the government’s commitment to maintaining the zero VAT rate for essential goods and services, ensuring that households have access to affordable basic needs. Essential commodities include:

  • Rice, corn, soybeans, fruits, vegetables, sweet potatoes, sugar, livestock, and fish
  • Groceries, medicine, education, and healthcare services
  • Affordable housing
  • Daily transportation and logistics services

Aim: Reducing Fiscal Deficit

The tax adjustment forms part of the government’s efforts to control the fiscal deficit, while minimizing the burden on the general public. As the tax base broadens, the government anticipates increased revenues, setting the stage for a return to a balanced budget by 2024.

By focusing the VAT increase solely on luxury goods and services, the government addresses fiscal concerns without imposing additional financial strain on the average Indonesian household. As economic conditions continue to improve, the government aims to implement further reforms that foster sustainable growth.

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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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Interim President Impeached Following Unresolved Drama in Corsel

by Chief Editor
written by Chief Editor

Krisis Politik Korea Selatan: Giliran Presiden Sementara Han Duck-soo Dicopot dari Jabatan

SEOUL — Drama politik di Korea Selatan (Korsel) terus berlanjut denganistos diIVESnim arrestasi Presiden Yoon Suk Yeol, kini giliran Presiden sementara, Han Duck-soo, yang dicopot dari jabatan. Suara mayoritas di Majelis Nasional Korsel telah menjatuhkanhma untuk atletama resignasi, menjadikan Han sebagai korban kedua dari test maressment di negara ini dalam kurun waktu kurang dari dua minggu.

Proses pemakzulan Han diluncurkan oleh oposisi setelah ia menolak untukpatterns keuangan danke cong ossilai three justices consiguióloro la audición]..

Hati-Hati! Hak Cipta Memiliki Kecuali aiz, Fiz _"

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Indonesia’s Ministry of Transportation to Launch Cibinong-Puncak Bus Route in February 2025

by Chief Editor
written by Chief Editor

Bogor‘s Puncak to See New Bus Services by 2025

Jakarta, CNN Indonesia — The Ministry of Transportation (Kemenhub) is gearing up to launch public bus services on the Cibinong-Puncak route in Bogor Regency, West Java. These services are expected to commence operations by February 2025.

According to Deputy Minister of Transportation Suntana, the new bus route aims to provide an alternative mode of transportation for residents and tourists heading to the Puncak area. "This will ensure they don’t have to rely on motorcycles and other vehicles," he said, as reported by Antara on Wednesday, December 25.

The program is government-subsidized and aims to introduce around 15-20 bus units serving the Cibinong to Puncak route and vice versa. Suntana explained that the subsidy aims to keep ticket prices affordable. "Residents can park their motorcycles in Karadenan or other designated areas and then take the bus at a very low cost," he said.

The new bus service is not only expected to provide convenience but also help alleviate traffic congestion and reduce road accidents on the popular Puncak tourist route. Suntana acknowledged that traffic congestion in the area remains a challenge, and the one-way system is being considered as a short-term solution. However, the ministry is also working with the Ministry of Public Works to develop long-term infrastructure solutions, such as the Cikampek Toll Road and the extension of the Puncak II route.

This initiative is part of Kemenhub’s ongoing efforts to improve transportation infrastructure and services in the region.

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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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Reveling the Positive Impacts of VAT Hike: What are They?

by Chief Editor
written by Chief Editor

Title: Indonesia‘s PPN Hike to 12% in 2025: The Projected Positive Impacts

Article:

Assistant Editor – December 26, 2024

Jakarta, Indonesia – The Indonesian Ministry of Finance (Kemenkeu) has outlined a series of positive impacts expected from the increase of Value Added Tax (PPN) from 11% to 12%, set to take effect on January 1, 2025. This tax hike aligns with the provisions of Law Number 7 of 2021, which harmonizes tax regulations and exempts essential daily goods and services from the increase.

Projected Positive Impacts

Analysts anticipate that the PPN hike will have a positive influence on four key sectors. These include:

  1. Job Creation: Following the PPN increase from 10% to 11% in 2022, the PPN 12% is projected to boost employment. Between 2015 and 2019, an average of 2.4 million jobs were created annually, representing a 2.0% increase. This figure jumped to 3.2% (or 4.2 million jobs) when PPN was increased to 11% in 2022. Post-2022, jobs growth averaged 3.4% (or 4.7 million jobs) per year.

  2. Formal Employment Growth: The PPN hike is also expected to drive formal employment growth. From 2015 to 2019, average annual growth was 3.8% (or 1.9 million jobs). In 2022, this figure increased to 3.6% (or 1.9 million jobs). Post-2022, the growth rate jumped to 6.4% (or 3.6 million jobs) per year.

  3. Personal Income Tax (PPh 21) Collection: The PPh 21 is projected to increase by 19.35% annually, following the PPN hike. From 2015 to 2019, the average annual increase was 7.2% (or IDR 8.5 trillion). In 2022, this increased to 16.3% (or IDR 24.5 trillion). Post-2022, the PPh 21 is expected to grow by 19.35% per year.

  4. Inflation Control: Despite the PPN increase, the ministry assures that inflation will be kept in check. Between 2015 and 2019, average annual inflation stood at 3.17%. Although it climbed to 5.51% in 2022 post-PPN hike, it is projected to decrease to 2.08% per year afterwards.

Mitigating Measures

Coordinating Minister for Economic Affairs Airlangga Hartarto has expressed optimism about maintaining purchasing power despite the PPN increase. He announced that the government will introduce various stimulus packages in 2025, including:

  • 50% discount on electricity tariffs from January to February
  • Property purchase tax exemption up to IDR 2 billion
  • Full government subsidy for electric motorcycles
  • 3% reduction in luxury goods sales tax (PPnBM) for electric cars
  • 0% PPN for the transportation sector
  • PPN exemption for essential commodities
  • A detailed list of luxury goods to be taxed at 12% PPN to be issued before January 1, 2025

Stay tuned for more updates on Indonesia’s economic developments.

(Source: Kementerian Keuangan Indonesia)

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