Jakarta (ANTARA) - Manpower Minister Yassierli ensured that the government's policy of increasing the value-added tax (VAT) rate to 12 percent would not neglect protection for workers, especially in the labor-intensive sector and those affected by employment termination.
According to Yassierli, the government had prepared various programs to support workers' welfare amid the implementation of the policy.
"The VAT increase is part of national economic policies under the leadership of President Prabowo Subianto, which upholds the principle of fairness," he noted in a statement here on Saturday.
He remarked that high-income people will pay higher taxes while low-income people will get full protection from the state.
He said the government provides incentives for workers in the labor-intensive sector by covering income tax for those with incomes of up to Rp10 million (around US$618) per month.
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In addition, the contributions for the Work Accident Insurance (JKK) program of state workers' insurance provider BPJS Ketenagakerjaan are also discounted by 50 percent for six months to ease the burden on companies and workers.
Furthermore, the government offers support through the Job Loss Insurance (JKP) program for laid-off workers. This program includes cash benefits of 60 percent of wages for five months, a training program worth Rp2.4 million (around US$148), and easy access to the government's Pre-Employment Program.
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"We want to ensure workers who lose their jobs can still have purchasing power and opportunities to improve their skills," he highlighted.
According to the minister, the policy is part of the government's strategy to improve people's welfare amid global economic challenges. With this step, the government seeks to maintain a balance between state revenue collection and social protection so that the economic policies can have an impact on all levels of society.
"We want to ensure that the government does not only focus on state revenue from taxes but also ensure that every policy that is implemented favors workers," he remarked.