The Jakarta Post
The Institute for Development of Economics and Finance (Indef) has refuted a statement made by President Joko “Jokowi” Widodo about the increase in people’s purchasing power, indicated by 12.1 percent value-added tax revenue growth.
Indef’s economist Bhima Yudhistira said the increase in income tax revenue did not reflect the people’s purchasing power because it was mainly caused by policy improvements by the Finance Ministry.
He said the nine-month tax amnesty that ended in March had improved taxpayer compliance, indicated by an increase in the use of invoices.
Speaking about a decline in people’s purchasing power, he referred to data issued by the Central Statistics Agency (BPS), showing reduced earnings by farmers and construction workers.
“The wages received by low-income families cannot follow the increasing prices of basic commodities. This causes a decline in their purchasing power,” said Bhima in Jakarta on Wednesday as quoted by tempo.co.
He further explained that sales of people’s daily needs, or fast-moving consumer goods (FMCG), grew only 2.7 percent from January to September, compared to 11 percent growth in the same period last year.
Bhima denied that e-commerce had taken over the sales of conventional retailers, saying that e-commerce businesses contributed less than 2 percent.
Previously, President Jokowi had rejected a statement made by economists and businesspeople about a decline in people’s purchasing power. He said such a decline was unlikely when the value-added tax revenue received by the government grew by 12.1 percent up to the third quarter. (bbn)