- VAT is the second largest contributor to Indonesia’s tax revenue.
- The government should focus on fairness, certainty, convenience, and efficiency in tax collection.
- Fairness is achieved when tax payable aligns with taxpayers’ ability to pay.
- VAT, as an indirect tax, treats commodities differently to achieve fairness.
- The thesis evaluates VAT regressivity, exemption policy, and new VAT policies’ cost-benefit.
- The first chapter assesses VAT progressivity using indices and finds it quite progressive.
- The second chapter analyzes VAT exemption on food and its effect on inequality, suggesting exemptions for cooking oil, sugar, beverages, and spices.
- The third chapter uses the Deaton model to analyze VAT on food items, recommending exemptions for most food items except fresh shrimp and milk.
Source: eprints.nottingham.ac.uk
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.
