YLKI suggests government increase tax on cigarettes instead of staple foods

TEMPO.CO, JakartaThe Indonesian Consumers Foundation (YLKI) has responded to the government’s plan to impose a value added tax (PPN) on staple or locally known foods sembako. YLKI considered the plan inhumane.

“This is clearly inhumane political discourse, especially in the midst of a pandemic as people’s purchasing power drops dramatically,” YLKI Chairman Tulus Abadi said in a written statement on Thursday. June 10.

The imposition of VAT, Tulus said, will become a new burden on the public and consumers as the prices of staple foods rise. Not to mention if there is a market distortion that causes higher prices.

The tax could also threaten the food security in the community. “So this plan must be canceled,” Tulus remarked.

Instead, the government should be more creative in increasing state budget revenue (APBN), for example by significantly increasing the tax on cigarettes.

“The potential for increasing the tax on cigarettes can reach over Rs 200 trillion. In addition, it will have positive impacts on the lower middle class, which means that it will reduce their cigarette consumption and allocate [their money] for food, ”added Tulus.

It was previously reported that the government plans to treat commodities as objects of taxation. Thus, agricultural, livestock, plantation and forestry products will be taxable goods subject to value added tax (VAT) tariffs.

The policy will be noted in the expansion of the regulated VAT object in the revision of Law No. 6 of 1983 on General Taxation Procedures (KUP).

Read: Market traders oppose government plan to tax staple foods


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