REPUBLIKA.CO.ID, JAKARTA -- The plan to impose value added tax (VAT) on farm commodities may harm farmers, Director General of Farm Product Management and Marketing at the Agriculture Ministry Yusni Emilia Harahap said.
"VAT may harm farmers, as the prices of farm products at the farmer level will come under pressure," Yusni said at a press conference here on Friday.
Due to VAT at farmer level, businessmen who are subjected to VAT will likely press the purchasing prices at the supplier level, he noted.
"As a result, the suppliers will later press the purchasing prices at the farmer level, so that the farmers will sell their commodities at lower prices," he said.
Under the Supreme Court's verdict No. 70P/Hum/2013, farm products, including plantation products, ornamental herb plants, food crops, and forestry products, will be subjected to VAT.
Consequently, the delivery and import of farm products will be subjected to VAT at 10 percent, while the export of farm products will be exempt from VAT.
"Currently, we are studying the problems and risks of imposing VAT," he noted.
The agriculture ministry has been coordinating with relevant agencies in taking necessary steps to resolve the issues, he added.
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