Tax Revenue Skyrocketed to IDR 21 Trillion in Just 4 Months!

VAT or PPn

The state tax received an additional super large fund of up to IDR 21 trillion in just 4 months. According to the Minister of Finance, Sri Mulyani, the soaring tax revenue was caused by the policy of the value-added tax (VAT) rate which rose to 11 percent.

“The VAT [tariff] has increased from 10 percent to 11 percent. I was asked what kind of contribution it will make to tax revenues. We’ll see that starting in April, it will provide a new contribution of IDR 1.96 trillion,” She said at a press conference on our State Budget, Thursday (11/8/2022). ).

Then, he revealed that VAT receipts in May jumped to Rp5.74 trillion and Rp6.25 trillion in June 2022.

Furthermore, VAT receipts continued to soar and the results in July 2022 reached the highest figure, which was 7.15 trillion. Thus, Sri Mulyani received additional tax revenue from the increase in VAT of Rp. 21.1 trillion, starting from the April-July 2022 period.

“Well, this illustrates that even though VAT has increased by only 1 percent, it is because the object is increasing. This means that the economic recovery is roaring, so the revenue will increase,” She added.

Based on data from the Ministry of Finance, tax revenues during January-July 2022 reached 1,028.5 trillion (YoY) or grew 58.8 percent compared to the same period last year which only touched Rp. 647.7 trillion.

Furthermore, tax revenues from non-oil and gas PPh reached IDR 595 trillion or 79.4 percent of the target. Tax revenues from PPN and PPnBM reached Rp. 377.6 trillion or 59.1 percent of the target.

Sri Mulyani added that revenues from PBB and other taxes were recorded at Rp. 6.6 trillion or 20.5 percent of the target. Meanwhile, oil and gas PPh only reached Rp 49.2 trillion, or 76.1 percent of the target.

“A very high growth occurred in June 2022 due to the high revenue from PPS which reached Rp 61 trillion,” She said

As previously reported, the Minister of Finance Sri Mulyani Indrawati stated that the value-added tax or VAT rate increase will remain in effect on April 1, 2022.

Sri Mulyani emphasized that the reason for the stipulation of the VAT increase was because the government carried out the mandate of Law Number 7/2021 concerning the Harmonization of Tax Regulations (UU HPP) related to VAT rates.

The regulation explains that the VAT rate will increase to 11 percent on April 1, 2022.

“[The VAT rate increase is not postponed] because [the government] uses it to return to society. The foundation must be prepared first [through strengthening the tax regime],” Sri Mulyani said on Tuesday (22/3/2022).

Sri Mulyani said that VAT was closely related to people’s consumption ability. Therefore, the government distributes social assistance to maintain the level of public consumption, especially among the lower classes.