Adil Al Hasan, Jakarta – Chair of the National Economic Council Luhut Binsar Pandjaitan has responded to the public outcry over the planned implementation of a 12% Value Added Tax (VAT) on January 1, 2025. He emphasized that President Prabowo Subianto is committed to avoiding additional burdens on the people.

"Essentially, the President doesn't want to burden the people," Luhut said to the media in East Kuningan, South Jakarta, on Wednesday, November 27, 2024.

Luhut attributed the public's negative reaction to a lack of understanding of the VAT structure and mechanism. He confirmed that the government will continue to discuss the plan for the tax increase. "People don't understand the structure yet," he said.

He further clarified that the decision regarding the VAT is still pending a final directive from President Prabowo. "It's almost certain to be postponed," he added.

He revealed that the government plans to provide economic stimulus to the public one to two months prior to the VAT implementation. He mentioned that the government is currently calculating the amount of this stimulus.

"Before that (the 12% VAT) is implemented, we will provide economic stimulus to the people," he said.

The Indonesian Chamber of Commerce and Industry (Kadin) has also expressed concerns about the 12% VAT plan. Kadin Chairman Arsjad Rasjid urged the government to review the plan.

"The timing isn't right. It's not just about the 12% rate," Rasjid told the media in Prapanca, South Jakarta, on Tuesday, November 26, 2024.

Source: https://en.tempo.co/read/1946024/economic-council-chair-luhut-says-12-vat-to-be-postpone