KBRN, Jakarta: The government emphasized that there will be no special social assistance (bansos) provided to mitigate the impact of the upcoming 12 percent value-added tax (VAT) increase, said Coordinating Minister for Community Empowerment Abdul Muhaimin Iskandar, commonly known as Cak Imin, as reported by rri.co.id.

"VAT increase is unrelated to any specific social assistance programs. The decision to increase VAT from 11 percent to 12 percent has been carefully considered," Cak Imin said in a written statement today (Dec 26).

He explained that the 12 percent VAT increase will only be applied to luxury goods, while those related to the livelihood of many people, such as the MSMEs and tourism, will be exempt from the increase.

"So, MSMEs and tourism, which are closely related to the livelihood of many people, will not be subject to 12 percent tax. The tax will only imposed on the luxury goods sector and various items that are not considered basic necessities," he said.

Cak Imin emphasized that the government will continue providing support and easing regulations for MSMEs.

He ensured that the government has carefully weighed the implications of increasing the VAT rate from 11 percent to 12 percent next year.

"We have carefully considered which items should and should not be subject to the increase, ensuring that economic growth is maintained while protecting and facilitating the people. The additional revenue will be used to fund various subsidies," he said. ***