Wijayanti Putri, Solo – Former President Joko "Jokowi" Widodo has voiced support for the government's decision to raise the value-added tax (VAT) rate from 11 percent to 12 percent, despite public opposition.

"The government must have already conducted calculations and considerations regarding the concerns raised by the public," Jokowi said on Friday in Solo, Central Java.

The VAT hike, set to take effect next week, is part of the harmonization of tax regulations approved by the House of Representatives (DPR) during Jokowi's presidency. The former president said the government has a duty to implement the policy in accordance with the law.

"I believe we should support the government's decision. Decisions like these are always made based on thorough considerations. Moreover, this is a legal mandate that the government must carry out," Jokowi said.

The Finance Ministry has clarified that the higher VAT rate will primarily apply to luxury goods, while staple goods will remain exempt.

Indonesia last increased the VAT rate from 10 percent to 11 percent in 2022. VAT revenue contributed 3.25 percent to the country's gross domestic product (GDP) in 2021, rising to 3.51 percent in 2022 and further increasing to 3.62 percent in 2023.

Jokowi also reiterated that the VAT adjustment aligns with legislative decisions and reflects the government's commitment to upholding the law. "This has already been decided by the DPR. The government must implement it. Once again, I am confident the decision was made based on careful deliberation," he concluded.

Source: https://jakartaglobe.id/news/jokowi-backs-vat-hike-to-12-percent-despite-public-outcr