Staples are subject to VAT, inflation will be out of control

Narasi Institute economist Achmad Nur Hidayat said that although the new tariffs were not implemented this year, the plan could disturb consumers' psychology.

"The plan to increase VAT on basic necessities will encourage people to buy basic necessities outside of their needs for fear of rising prices," he said, adding that the potential for inflation this year would increase by 1%-2.5% so that inflation in 2021 could reach 2.18%-4.68. %. In addition to causing inflation that is burdensome for consumers in general, Achmad said that an increase in VAT of 12% on basic necessities from agricultural production will also cause small farmers to lose their welfare and eventually become poorer in the midst of the pandemic. This can happen because small farmers find it increasingly difficult to sell their products when consumers put the brakes on spending due to the increase in the VAT rate. The Deputy Chairman of the People's Consultative Assembly (MPR) Arsul Sani also said that the VAT rate increase was contradictory to the relaxation policy of the Sales Tax on Luxury Goods (PPnBM). In fact, only a limited number of people will benefit from the PPnBM policy, unlike VAT, which involves a large number of people. Meanwhile, Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Nathan Kacaribu, said that middle and high-income countries generally receive their tax revenues dominated by VAT, not income tax (PPh).

|•SOURCE•| Image :PIKIRAN RAKYAT |

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