JAKARTADAILY.ID - The Ministry of Finance will soon increase the value-added tax (VAT) rate, as regulated in the Law on the Harmonization of Tax Regulations (Undang-Undang Harmonisasi Peraturan Perpajakan, UU HPP), effective from April 2022.
As quoted via PMJ News on Wednesday, February 23, 2022, the VAT fee will increase to as much as 11 percent due to this regulation.
Febrio also explained that the government had anticipated the increase in the VAT rate along with its impact on rising inflation.
According to him, inflation will not increase because of the imposition of the tax.
"We've already estimated it [the impact of this inflation] will be minimal, so there is no need to worry," he said.
The increase in inflation was instead caused by rising world food prices. Regardless, the government must monitor and make adjustments to continue the economic recovery trend and ensure the right time to issue policies.
He further stated that inflation would remain under control throughout the year. He reasoned that the national economy has become stronger in recent months, and the core inflation component, which is people's purchasing power, is getting better.
"We will continue to see people's purchasing power gradually improve," he said.