VAT 12 for Textile Entrepreneurs will be a burden on the textile sector

Manufacturers ASSOCIATION ThreadFibers and Filaments (APSyFI) states that it applies VAT 12% will certainly burden the entire industrial chain, especially in the textile and textile products (TPT) industry sector.

APSyFI General Chair Redma Gita Wirawasta said, moreover, the textile sector itself has a long value chain from petrochemicals to retailers and consumers. Of course, this is very burdensome for the textile industry.

“If the VAT is 12% it will certainly burden the entire industrial chain, especially the textile sector. But if the decision is only VAT on BM, I think it’s still fair. So only the final product will be affected, and it won’t be a burden on the entire value chain,” said Redma when contacted. Monday (16/12).

Also read: 12% VAT Will Reduce the Growth of the Automotive Industry

Apart from that, regarding the provision of incentives to the textile industry as a form of compensation for the implementation of the 12% VAT rate, Redma said that these incentives could not have a significant impact on the textile industry, because for more than 2 years the sector had not received a profit.

“If the scheme is to increase VAT and not BM VAT, the incentives given are very far from equal and will not have much effect,” he said.

He said that the current problem with the textile industry is that the market condition is still sluggish because it is full of illegally imported goods circulating without paying taxes and import duties.

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According to him, with market conditions still sluggish, any incentives will be less than optimal if the goods are difficult to sell, because the market is full of illegally imported goods.

“Any incentives will be difficult if we have to fight against illegally imported goods. Unless the government gives us tax exemption as has been enjoyed by illegally imported goods, then we can compete,” he said.

Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto said that 12% VAT would start on January 1 2025. This 12% VAT rate policy is in accordance with the mandate of the Law on Harmonization of Tax Regulations (UU HPP). (Fic/M-3)