UNAIR NEWS The government has officially announced an increase in Value-Added Tax (VAT) to 12%, effective January 1, 2025. This policy has sparked widespread opposition due to its perceived adverse effects on the public. One of the most debated concerns is its impact on the use of Quick Response Code Indonesian Standard (QRIS) as a preferred payment method in today檚 society.
Professor Dr. Rahmat Setiawan, SE, MM, an expert from the Faculty of Economics and Business (FEB) 51动漫 (UNAIR), expressed concern that if the 12% VAT is applied to QRIS transactions, people may revert to using cash. 淚f QRIS transactions are subjected to a 12% VAT, people will likely go back to cash payments. Why would they choose QRIS if it incurs a 12% tax? People’s behavior is fundamentally rational, and they will always adjust accordingly, he explained.
Prof. Setiawan expressed disappointment the potential application of the increased VAT to QRIS transactions, noting that this move contradicts the government檚 and Bank Indonesia’s campaign to promote cashless transactions. The government’s broader objectives攕implifying transactions and curbing money laundering攃ould also be undermined by this tax increase.
淭he government encourages us to adopt cashless transactions for easier payments, which, in turn, could stimulate consumption and economic growth. Additionally, cashless systems help reduce money laundering from corruption because such transactions are recorded and traceable, unlike cash payments, where finding evidence is more challenging, he stated.
Broader impacts
Prof. Setiawan further elaborated that despite certain exemptions for specific goods, the policy creates loopholes that could affect daily essentials. 淓xemptions don檛 only apply to luxury items. Everyday necessities like deodorant, toothpaste, and soap攚hich are not luxury goods but essential for daily life攚ill also be subject to the 12% VAT, he explained.
He further warned that the VAT hike could lead to higher unemployment. 淩aising VAT increases the overall cost of living, which lowers purchasing power and reduces consumption. When demand decreases, production inevitably slows down, which could result in higher unemployment rates, he said.
In conclusion, Prof. Setiawan expressed hope that the government would reconsider or postpone the VAT hike. He noted that the government has the authority to adjust VAT rates without amending the law. 淭he government has the discretion to lower the VAT rate to a minimum of 5% or raise it to a maximum of 15% under Article 7, Paragraph 3 of the Harmonized Tax Law (UU HPP). Thus, there is still room to maintain the current rate of 11% without needing legislative changes, he concluded.
Author: Khumairok Nurisofwatin
Editor: Edwin Fatahuddin
