Increase in VAT Can Raise Inflation

The government needs to ensure that economic conditions, especially household consumption, have recovered, before considering raising the rate of Value Added Tax.

The plan to increase VAT is considered to be burdensome for the economic recovery process, especially in terms of purchasing power. VP Economist PT Bank Permata Tbk. Josua Pardede said that an increase in the VAT rate has the potential to increase inflation to the range of 3%–4%, so that it will have an impact on holding back people's purchasing power. "This increase in inflation will tend to limit people's purchasing power so that household consumption also slows down which in the end will have the potential to limit the pace of economic growth in 2022," Josua said, instead of increasing VAT, the government could increase the excise tax on alcohol and cigarettes or implement environmental taxes. . To optimize state revenue, the government can also reduce tax spending, so that it can encourage more optimal tax revenues. However, the discourse on the increase in VAT is known to be only an internal discussion of the Ministry of Finance because the Coordinating Ministry for Economic Affairs feels that it has not been involved. Secretary of the Coordinating Ministry for Economic Affairs Susiwijono Moegiarso said he respected the internal discussions at the Ministry of Finance. "But there is no inter-ministerial coordination meeting to discuss this," he said during a talk with reporters

|•SOURCE•| Articles :INTERNATIONAL | Image :IWNSVG |

READ MORE

|• NATIONAL •|JOKOWI Changes UI Statute
|• INTERNATIONAL •|The Woodcutter Was Attacked by TIGER
|• BANKING •|the-Fate Of Office Property Business
|• POLITICS •|Limited Subsidized Housing Budget
|• SCIENCE •|Through Education, ETF Preserves Eka Tjipta Widjaja's Life Philosophy