Jakarta. Chairman of Commission XI of the House of Representatives, Mukhamad Misbakhun, has proposed reducing the Value Added Tax (VAT) rate from 11 percent  to 10 percent. Misbakhun stated that such a fiscal policy could ease the burden and reduce the suffering of the people.

“This policy is in line with President Prabowo Subianto’s strong commitment to alleviate the hardships of the Indonesian people,” Misbakhun said on Sunday.

Misbakhun explained that President Prabowo wants the common people  to be able to smile. He believes that this spirit is simple yet meaningful, reflecting the noble purpose of leadership.

“This is a very simple wish from the President, but it carries deep meaning and a noble goal. There must be policies to ease the tax burden on ordinary people in today’s situation,” Misbakhun emphasized.

He further highlighted the importance of maintaining household consumption to ensure strong purchasing power. Therefore, Parliament is ready to support any policy that can sustain the people’s consumption strength.

He even proposed that some agricultural derivative products currently subject to VAT should be taxed at only 8 percent. This measure, he said, would strengthen downstream industries and support agricultural sector industrialization.

“This could reinforce downstreaming and industrialization in the agricultural sector. Of course, it would put pressure on state revenues,” said Misbakhun, who also serves as Chairman of the Central Executive Board of the Sentra Organization of Indonesian Self-Reliant Workers (SOKSI).

However, he noted that reducing VAT from 11 percent to 10 percent would not have a significant impact, as the reduction could be offset by increased economic transactions.

“A lower VAT rate will stimulate household consumption and demand for goods. This, in turn, will boost productivity in the real sector,” he concluded.

Tax rates have been one of the triggers for protests in several regions. Tax hikes have drawn public opposition, including in Pati Regency, Central Java. It was reported that residents in Pati rejected Regent Sudewo’s plan to increase the Rural and Urban Land and Building Tax (PBB-P2) by up to 250 percent. As a result, the Pati community alliance staged a mass demonstration on August 13, demanding not only the cancellation of the tax hike but also calling for the regent’s resignation.