Analyst Advocates for Tax Evasion Crackdown Over VAT Increase

• A rioter protested in Jakarta with a sign criticizing government tax policies
• Analysts suggest the government should focus on cracking down on tax evasion instead of increasing the VAT from 11 percent to 12 percent
• The VAT increase targets luxury goods while exempting staple goods
• Yusuf Wibisono from Next Policy argues that the VAT hike could negatively impact the purchasing power of low and middle-income groups
• Yusuf advocates for addressing tax crimes such as under-reporting of sales to boost VAT revenue without raising rates
• Despite a planned VAT increase, Indonesia’s luxury tax revenue target for 2025 is significantly lower than the current year
• Indonesia previously increased VAT from 10 percent to 11 percent in 2022
• VAT revenue as a percentage of GDP has been rising annually since 2021
• Income tax revenue relative to GDP has remained relatively stagnant and is expected to decline

Source: jakartaglobe.id

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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