Antara, Jakarta – Center for Indonesian Policy Studies (CIPS) head researcher, Felippa Ann Amanta, assessed the effects of the government plan upon imposing added-value tax (PPN) on staple foods (sembako) and how it affects food security.
Amanta believes the PPN on staple foods will definitely affect Indonesia's economy in general as it directly affects public consumption. Especially towards low-income households which she believes will see a third of Indonesians unable to purchase pricier nutritious food.
Citing Antaranews, the researcher said on June 9th "the plan will not only increase food prices and threaten food security but it would also badly affect Indonesia's economy in general."
By the increased prices, the researcher argues that the tax plan will worsen the situation amidst a Covid-19 pandemic that is already in itself economically crippling for the demographic that is prone to plunging below the poverty line.
"Adding added-value tax will increase prices and worsen the situation especially during a pandemic as society's income is already dropping," said the CIPS head researcher.
Amanta argues that a study shows that food spending constitutes 56 percent of low-income households' total spending and adding PPN on their most vital spending can largely affect their livelihood.
Indonesia ranks 65th out of 113 countries in the Economist Intelligence Unit's Global Food Security Index, with affordability being the main factor behind the poor ranking.