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Widespread Opposition to Indonesia's Planned PPN Hike
Indonesia's planned 12% Value Added Tax (PPN) increase in 2025 faces widespread public opposition, prompting calls for a Presidential Regulation in Lieu of Law (Perppu) to cancel the hike, due to concerns about its impact on the economy and the most vulnerable.
- What are the immediate impacts of the planned PPN increase to 12% in Indonesia, and what is the scale of public opposition?
- The Indonesian government's plan to raise the Value Added Tax (PPN) to 12% in 2025 has faced significant public opposition, with nearly 200,000 signatures on a petition and public protests. This increase is mandated by the 2021 Harmonization of Tax Regulations Law (UU HPP).",
- What are the long-term economic and social consequences of maintaining the planned PPN increase, and what alternative solutions could mitigate these impacts?
- The proposed Perppu approach is supported by former tax officials, highlighting the urgency of the situation and the potential economic consequences of the PPN increase, such as inflation, reduced household spending, and job losses. The reliance on PPN for 43.2% of tax revenue in the 2025 budget raises concerns about its impact on the most vulnerable.
- What legal options are available to the Indonesian government to address the public opposition to the PPN increase, and what are the potential challenges of each?
- Experts like Mhd Zakiul Fikri of Celios suggest the government should reconsider this policy due to the widespread opposition. They propose using Article 7, paragraph 3 of the UU HPP, which allows flexibility in PPN rates, although this option presents legal ambiguities. Alternatively, they advocate for a Presidential Regulation in Lieu of Law (Perppu) to immediately overturn the increase.
Cognitive Concepts
Framing Bias
The article frames the narrative around the widespread public opposition to the PPN increase and the proposed solutions to overturn it. The headline (not provided but inferred from the text) likely emphasizes the rejection of the policy. The focus on the negative consequences and calls for cancellation strongly influences the reader's perception of the policy as negative and unpopular.
Language Bias
The article uses language that leans towards portraying the PPN increase negatively. Terms like "gelombang penolakan" (wave of rejection), "banjir penolakan" (flood of rejection), and descriptions of the potential negative economic consequences are emotionally charged. While presenting Zakiul Fikri's and Hadi Poernomo's arguments, the article uses more neutral language but the selection of these arguments, and their critical tone toward the policy, influences the overall perception. More neutral phrasing could be used, for instance, instead of "banjir penolakan" one could use "significant opposition.
Bias by Omission
The article focuses heavily on the opposition to the PPN increase and the proposed solutions, particularly the suggestion of a Perppu. It mentions the government's reliance on PPN for revenue (43.2% of total tax revenue) but doesn't delve into the government's justifications for the increase or explore alternative revenue-generating strategies in detail. The perspectives of those who support the PPN increase are largely absent.
False Dichotomy
The article presents a false dichotomy by framing the situation as a choice between accepting the 12% PPN increase or issuing a Perppu to cancel it. It doesn't explore alternative solutions, such as adjusting the increase, targeting specific sectors, or implementing other tax reforms. This limits the reader's understanding of the complexities involved.
Sustainable Development Goals
The planned increase in PPN (Value Added Tax) to 12% in 2025 is projected to disproportionately affect low- and middle-income households, widening the gap between rich and poor. This is because a larger percentage of their income is spent on consumption, making them more vulnerable to price increases resulting from the tax hike. The article highlights concerns about increased inflation, reduced consumption capacity among the lower classes, potential job losses, and a negative impact on SMEs and the manufacturing industry, all contributing to increased inequality.