Jakarta, Indonesia Sentinel — An online petition urging the Indonesia government to cancel its planned Value-Added Tax (VAT) increase to 12% in 2025 has garnered over 100,000 signatures. The signatures reflecting widespread public concern despite government assurances of targeted implementation and accompanying incentives.
The petition, titled “Government, Immediately Cancel the VAT Increase!”, was launched on Change.org by a group called Bareng Warga on November 19, 2024. By Thursday, December 19, at 12.00 P.M local time, the petition had collected 105.234 signatures approaching its goal of 150.000, with over 43.000 new signatories added within a single day.
Economic Concerns and Public Backlash
According to a report from DetikFinance, the petition organizers argue that raising VAT to 12% will worsen economic hardships for Indonesians, particularly as household purchasing power remains weak amid high unemployment levels.
“The plan to raise VAT will only deepen people’s economic struggles. Prices of essential goods will increase, even though economic conditions are far from stable,” the petition states.
The petition cites data from Indonesia’s Central Statistics Agency (BPS), which reported 4.91 million unemployed as of August 2024 and 83.83 million workers employed in informal sectors.
Organizers further criticized minimum wages that fail to meet basic living costs. For instance, BPS data from 2022 indicated that a decent standard of living in Jakarta requires Rp14 million ($900) per month, while the city’s minimum wage for 2024 remains at Rp5.06 million ($325).
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For this reason, the petition urged Indonesia government to revoke the planned VAT increase to 12% in 2025. “Before the public’s hardship deepens further. Before mounting online loan debts spiral out of control,” the petition states.
Indonesia VAT Increase 2025
The VAT increase is mandated under Indonesia Law No. 7 of 2021 on Tax Regulation Harmonization (UU HPP). The government has confirmed the tax hike will take effect on January 1, 2025, targeting premium goods and services while exempting essential items and services for the general population.
“This is in line with the tax harmonization law and follows the scheduled implementation. The VAT rate will increase to 12% starting January 1, 2025,” said Coordinating Minister for Economic Affairs Airlangga Hartarto during a press conference on Monday, December 16.
The growing public support for the petition underscores the concern about the VAT hike’s potential impact on everyday life were remains, despite government announcement on the exemptions and several incentives accompanying VAT 12% implementations.
(Raidi/Agung)
