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Jakarta urged to delay fuel tax hike amid economic instability

Tempo - February 1, 2024

Annisa Febiola, Jakarta – Jakarta Chamber of Commerce and Industry (Kadin) chairperson, Diana Dewi, criticized the recent policy of the provincial government to increase the vehicle fuel tax by 10 percent. She believed that the policy was issued at an inappropriate time and requested the city administration to review and postpone it.

Diana opined that the government should not forcibly impose such a tax hike amid the current unstable economy, not to mention that Indonesia is currently holding the presidential election this February. "This will, of course, drain the energy and focus of state administrators," she told Tempo on Wednesday, January 31.

She also pointed out that people's purchasing power is declining while the prices of basic commodities continue to rise. "The inflation rate also tends to soar."

An increase in taxes, she assessed, would eventually lead to a rise in fuel prices, which could potentially boost inflation and the prices of basic commodities. "Control efforts are needed, at least for basic needs so that prices can be more affordable. If necessary, the government should intervene in market prices," Diana suggested.

As widely reported, the Jakarta provincial government officially increased the vehicle fuel tax (PBBKB) by 10 percent through the issuance of Regulation No. 1 of 2024 on the regional taxes and levies, which was inked by Jakarta Acting Governor Heru Budi Hartono on January 5 and effective immediately.

Source: https://en.tempo.co/read/1828372/jakarta-urged-to-delay-fuel-tax-hike-amid-economic-instabilit