Commission XI Ensures the HPP Bill Prioritizes the Interests of the Community and MSMEs

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ACCURATE.CO The government and Commission XI of the DPR RI agreed to continue the discussion of the Draft Law on General Provisions and Tax Procedures (RUU KUP) which was later agreed to become the Tax Regulation Harmonization Bill (HPP) to Level II Discussions/Decision Making at the DPR RI Plenary Meeting.

In this regard, Member of Commission XI of the Indonesian House of Representatives, Puteri Anetta Komarudin, emphasized that the HPP Bill is certainly in favor of the interests of the community and Micro, Small and Medium Enterprises (MSMEs).

“From the start, we have consistently rejected the plan to increase the VAT rate because it will greatly affect the purchasing power of the people who have not fully recovered due to the pandemic. However, on the one hand, we also understand that state revenues are still not optimal. So, during the last discussion, we agreed that the increase should be carried out gradually while continuing to monitor economic conditions so as not to damage the momentum of the ongoing recovery,” said Puteri in her press statement, Friday (1/10/2021).

According to Puteri, during the discussion of the Bill the Golkar Party Faction fought for the abolition of the multi-tariff VAT provision which was later agreed upon. He also expressed his appreciation for the government’s policy of agreeing to cancel the proposal.

“Multi-tariff VAT actually creates complexities in administration and increases inspection fees,” said the legislator for the West Java VII electoral district

Puteri also conveyed a note from the Golkar Party faction regarding the potential for excessive taxation in the provisions related to the imposition of VAT for a number of goods and services that were not previously imposed.

“This potential was finally avoided by agreeing on basic necessities, educational services, medical health services, financial services, insurance services and a number of other services to get VAT facilities not to be collected or waived. We assess that these goods and services are very much needed by the community, so that if VAT is imposed, it will actually increase the burden and weaken public consumption, “said Puteri.

Furthermore, Puteri revealed that these concerns can also be avoided thanks to the agreement to abolish the new norm regarding minimum income tax (alternative minimum tax or AMT) in the HPP Bill.

“Regarding AMT, our stance remains against the plan. The proposal actually adds to the burden for business actors who experience losses so that it can trigger business closures and layoffs. In addition, this plan also does not support the investment climate that has the potential to leave investors from Indonesia. Of course, this will have a big impact on startups that are still in the development stage,” he said.

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