Ahead of the determination of the value added tax (VAT) rate to 11% starting April 1, 2022, news circulated that the Ministry of Finance would delay the planned VAT increase. Entrepreneurs also welcomed it. Meanwhile Plt. The Director General of Chemical, Pharmaceutical and Textile Industries (IKFT) Ignatius Warsito said that the industry would be affected by the VAT change. "The increase in VAT is under the authority of the Ministry of Finance, but on the domestic industry side, taxes including VAT are one of the components in the product, in addition to the logistics of labor and raw materials," he said in Manufacture Check, Friday (18/3/22).

The increase in VAT will have a direct impact on the price of the product received by the final consumer. If later it is more expensive, then my product competitiveness will decrease.

"The increase in VAT will affect the prices of products presented by the domestic industry, thereby reducing competitiveness compared to relatively cheap imported goods," explained Ignatius Warsito.

Meanwhile, the Chairman of the Indonesian Employers' Association (Apindo) Hariyadi Sukamdani admitted that indeed if there was an increase of 1%, it would automatically affect the price increase because it was in the final purchase.

"There will definitely be an impact on inflation. But we have heard that the Ministry of Finance will delay finding a more appropriate momentum and we support if there is such a plan. We are waiting for the situation to get better and the VAT will be imposed," he said.

He realized that the increase in VAT for state revenues. Where in the initial plan it will be 12%, while in the beginning, namely April 2022, it will rise to 11% first.

"If you can withdraw, wait for a better situation. This is a consequence of the need for state finances that must be supported, that is what must be done," said Hariyadi.

Previously, the VAT delay was even submitted by entrepreneurs and considered by the Directorate General of Taxes (DGT) of the Ministry of Finance.

It is known, with the 1% increase in VAT, starting next month the public's burden of purchasing various types of needs will be more expensive. Likewise eating in restaurants that are increasingly expensive.