Executive DIRECTOR of the Center of Reform on Economics (CORE), Mohammad Faisal, said that people must shop wisely when the 12% value added tax or (VAT) comes into effect.
“Shopping must be better designed, filtered, more efficient, don’t buy things that are not really necessary,” said Faisal when contacted on Wednesday (20/3).
VAT, said Faisal, will generally reduce people’s purchasing power, especially in relation to the real sector and this is different from Income Tax (PPh).
“Apart from that, in matters of justice, because VAT is for all levels of society, both rich and poor (they) are affected equally. Because it applies to transactions of goods and services, it is different from PPh, where the rates are different for rich and poor people,” explained Faisal.
Furthermore, Faisal touched on the issue of implementing free lunch. If the implementation of free lunch continues to use the initial design which costs IDR 400 trillion, Faisal emphasized that this will clearly burden the government budget.
“That’s why if new programs such as free lunch are designed more wisely, taking into account issues of efficiency and effectiveness in achieving goals, this could reduce budget needs,” he said. (Z-8)
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