{"id":168,"date":"2025-04-05T08:00:19","date_gmt":"2025-04-05T01:00:19","guid":{"rendered":"https:\/\/provisio-id.com\/provisioconsulting\/?p=168"},"modified":"2025-04-05T08:00:19","modified_gmt":"2025-04-05T01:00:19","slug":"inflation-remains-stable-despite-vat-increase","status":"publish","type":"post","link":"https:\/\/provisio-id.com\/provisioconsulting\/inflation-remains-stable-despite-vat-increase\/","title":{"rendered":"Inflation Remains Stable Despite VAT Increase?"},"content":{"rendered":"\n<p><a href=\"https:\/\/provisio-id.com\/provisioconsulting\/\">https:\/\/provisio-id.com\/provisioconsulting\/<\/a> &#8211; Inflation Remains Stable Despite VAT Increase? This is Bank Indonesia&#8217;s Explanation<br><br>New Policy: VAT Increases, Inflation Remains Under Control<\/p>\n\n\n\n<p>With the enactment of the Harmonization of Tax Regulations (HPP) Law, the public needs to be prepared for a 1% increase in the price of goods and services due to an increase in the VAT rate. This policy is based on Law Number 7 of 2021 to increase state revenue and maintain economic stability. However, the VAT hike has sparked discussion on its impact on inflation, economic growth, and public savings.<\/p>\n\n\n\n<p>Bank Indonesia (BI) Deputy Governor Aida S Budiman said that the <a href=\"https:\/\/provisio-id.com\/provisioconsulting\/cashless-transactions-are-subject-to-vat-tax\/\">impact of the VAT <\/a>increase on domestic inflation is relatively limited. She explained that goods and services subject to the 12 percent VAT are generally premium goods, such as foodstuffs and exclusive healthcare services, as well as high-capacity household electricity. According to the 2022 cost of living survey, these goods account for only 52.7 percent of the total consumer price index (CPI). The impact of the VAT increase is expected to add 0.2 percent to inflation, which remains within BI&#8217;s inflation target range of 1.5-3.5 percent.<\/p>\n\n\n\n<p>Other Factors that Maintain Inflation Stability<\/p>\n\n\n\n<p>In addition to the impact of the VAT increase, BI noted the decline in global commodity prices which helped keep inflation under control. BI is committed to working with the central and local governments to ensure the stability of food prices, which are often a major factor in rising inflation.<\/p>\n\n\n\n<p>Read also: <\/p>\n\n\n<ul class=\"wp-block-latest-posts__list wp-block-latest-posts\"><li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/provisio-id.com\/provisioconsulting\/masa-depan-pajak-di-indonesia\/\">Masa Depan Pajak di Indonesia<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/provisio-id.com\/provisioconsulting\/kesalahan-fatal-dalam-manajemen-pajak-yang-harus-dihindari\/\">Kesalahan Fatal dalam Manajemen Pajak yang Harus Dihindari<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/provisio-id.com\/provisioconsulting\/mengapa-perusahaan-mulai-beralih-ke-konsultan-pajak-profesional-di-2026\/\">Mengapa Perusahaan Mulai Beralih ke Konsultan Pajak Profesional di 2026<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/provisio-id.com\/provisioconsulting\/digitalisasi-pajak-di-indonesia-tantangan-dan-peluang-bagi-wajib-pajak\/\">Digitalisasi Pajak di Indonesia Tantangan dan Peluang bagi Wajib Pajak<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/provisio-id.com\/provisioconsulting\/konsultan-pajak-untuk-umkm-vs-perusahaan-besar\/\">Konsultan Pajak untuk UMKM vs Perusahaan Besar<\/a><\/li>\n<\/ul>\n\n\n<p><\/p>\n\n\n\n<p>Aida also mentioned that the impact of the VAT increase on economic growth is relatively small, only ranging from 0.02 to 0.03 percent. Various government incentives, such as the abolition of the Land and Building Acquisition Duty (BPHTB) and other stimulus policies, will help minimize the negative impact on the economy.<\/p>\n\n\n\n<p>BI Rate and Exchange Rate Stability<\/p>\n\n\n\n<p>To support economic stability, Bank Indonesia decided to maintain its benchmark interest rate at 6 percent. BI Governor Perry Warjiyo emphasized that monetary policy will continue to be directed at maintaining rupiah exchange rate stability and ensuring inflation remains within target. Perry explained that global uncertainties, including US monetary policy and geopolitical escalation, are the main challenges affecting the rupiah exchange rate.<\/p>\n\n\n\n<p>As of December 17, 2024, the rupiah depreciated by 1.37 percent compared to the previous month. However, this depreciation is still smaller than other regional currencies such as the Taiwan dollar, Philippine peso, and Korean won. BI continues to monitor exchange rate movements and will consider room for interest rate adjustments if necessary.<\/p>\n\n\n\n<p>Impact on Business World and Stimulus Expectations<\/p>\n\n\n\n<p>Chairman of the Indonesian Employers Association (Apindo), Shinta W Kamdani, explained that businesses respect BI&#8217;s interest rate policy. However, she hopes that this policy will not only focus on stability, but also support competitiveness and economic growth. In the context of the current market downturn, lower interest rates are considered more conducive to encouraging consumption and investment, especially in the real sector.<\/p>\n\n\n\n<p>Shinta added that exchange rate stability is also an important factor. If the exchange rate weakens too quickly, this could create a new burden for businesses. Ideally, government policies need to be more effective in encouraging exports and direct investment so as not to rely solely on BI rates to stimulate the economy.<\/p>\n\n\n\n<p>Impact on Public Savings<\/p>\n\n\n\n<p>The increase in VAT also has an impact on public savings trends. Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS), Purbaya Yudhi Sadewa, said that the VAT increase shows the government&#8217;s need to cover the budget. However, he noted that the funds going to the government do not directly impact the financial system, so the growth of public savings will slow down in the short term.<\/p>\n\n\n\n<p>According to Purbaya, the projected growth of third-party funds (DPK) in 2025 is in the range of 6-7 percent, with the VAT hike as one of the influencing factors. He emphasized that the effect of the VAT hike on the economy will be more significant if the funds are used efficiently to boost economic growth.<\/p>\n\n\n\n<p>Read also: Complete List of 2025 Economic Stimulus Incentives in the Face of 12% VAT<\/p>\n\n\n\n<p>The Importance of Integrated Policies<\/p>\n\n\n\n<p>The increase in VAT to 12 percent in 2025 is a strategic move by the government to increase state revenue amid global economic challenges. Although the impact on inflation and economic growth is relatively small, this policy still raises concerns, especially for businesses and the general public.<\/p>\n\n\n\n<p>The government needs to ensure that the VAT increase is accompanied by an integrated VAT policy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>https:\/\/provisio-id.com\/provisioconsulting\/ &#8211; Inflation Remains Stable Despite VAT Increase? This is Bank Indonesia&#8217;s Explanation New Policy: VAT Increases, Inflation Remains Under Control With the enactment of the Harmonization of Tax Regulations (HPP) Law, the public needs to be prepared for a 1% increase in the price of goods and services due to an increase in the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[7],"tags":[],"class_list":["post-168","post","type-post","status-publish","format-standard","hentry","category-tax-consultant"],"_links":{"self":[{"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/posts\/168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/comments?post=168"}],"version-history":[{"count":1,"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/posts\/168\/revisions"}],"predecessor-version":[{"id":169,"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/posts\/168\/revisions\/169"}],"wp:attachment":[{"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/media?parent=168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/categories?post=168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/provisio-id.com\/provisioconsulting\/wp-json\/wp\/v2\/tags?post=168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}