Yustinus Paat, Jakarta – The increase in value-added tax (VAT) from 11 percent to 12 percent, effective next month, was initiated by the Indonesian Democratic Party of Struggle (PDI-P), a senior lawmaker said on Sunday. The statement appeared to counter the party's recent opposition to the hike.

PDI-P remains the only major party that has declined to openly support Prabowo Subianto's presidency and has increasingly taken a critical stance towards the government, including in debates over the VAT hike.

Wihadi Wiyanto, deputy chairman of the House of Representatives Budget Committee, revealed that the tax harmonization legislation passed in 2021, which includes the VAT increase, was proposed by PDI-P.

The lawmaker, a member of Prabowo's Great Indonesia Movement Party (Gerindra), criticized PDI-P for what he described as contradictory behavior, noting that the party's opposition to the VAT hike came after it no longer controls the government.

"The working committee's meetings on the [tax law] were led by PDI-P, but now they are urging the law to be postponed in what appears to be an attempt to discredit the Prabowo administration," Wihadi said.

By contrast, Wihadi argued, President Prabowo has sought to implement the law cautiously by limiting the VAT increase to luxury goods, aiming to minimize the financial burden on low-income families.

"It's not true that the VAT hike was decided by the Prabowo administration. This legislation was initiated by PDI-P, and the current government shoulders the duty to implement it," Wihadi said.

The lawmaker urged other political parties to refrain from falsely attributing blame to Prabowo for the tax increase, emphasizing that the decision was made during the previous House term under PDI-P leadership.

Source: https://jakartaglobe.id/news/senior-lawmaker-says-vat-hike-was-initiated-by-pdi