"A postponement is almost certain," he remarked in Jakarta on Wednesday.
He explained that the government would initially formulate and distribute a stimulus or incentive to those belonging to the middle class before eventually executing its VAT increase plan.
"Before proceeding to the 12 percent VAT policy, we need to provide a stimulus to strengthen the economy of those in need," he noted.
Elaborating on the incentive, Pandjaitan underscored that it would take the form of subsidies for electricity rather than direct cash aid to ensure effectiveness and prevent misuse.
He then affirmed that the government had opted to allocate a portion of the state budget (APBN) to the provision of the electricity incentive while noting that the distribution mechanism will soon be ready.
Earlier, on November 13, Minister of Finance Sri Mulyani Indrawati stated that the plan to increase the VAT to 12 percent, starting January 1, 2025, will continue to be carried out in accordance with the mandate of the Tax Regulation Harmonization Law (UU HPP).
The UU HPP promulgated in 2021 puts forward the 12 percent VAT proposal, which was drafted by considering the people's basic needs and health conditions amid the COVID-19 pandemic.
At a meeting with Commission XI of the House of Representatives (DPR) in Jakarta, the state treasurer assured that the government always considered the conditions of various sectors while formulating tax-related policies.
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Translator: Ahmad M, Tegar Nurfitra
Editor: Rahmad Nasution
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