LST Removal

Hi there guys, we met again at last! Just a few moments ago government made a decision to remove PPnBM (Pajak Penjualan Barang Mewah) or LST (Luxuries Sales Tax) except for automotive products any thought why?

Based on our mini research, Indonesia’s economic growth are on a sluggish phase. In the first quarter of 2015 Indonesia’s economic growth is 4.71% which is slower if we compared to the same quarter in 2014 which is 5.14%. If this trends continues to happen, Indonesia’s economic condition might be in jeopardy. So how could this be happen? Again we analyze and search for a credible information, and it turns out that there are two main culprit. Firstly is the government itself, due to late ratification of Indonesian Revised Budget (APBN-P) which just finalize on February makes the states expenditure not optimal. Secondly is the private sector, the investor tend to perform “wait and see” because Rupiah’s exchange rate towards US Dollar recently fall sharply & there was a really chaotic condition on the new police head, in addition our export volume is decreasing this period.

So how to counter this miserable trend? There are many ways to overcome this problem, and we wanted to underline 2 ways, first is country competitiveness in all aspect, such as human & natural resources and technology. Why and how competitiveness could resulted in positive economic growth? Simply imagine you are the only humankind who can produce electricity, so if anybody in the world wanted to get electricity will buy it from you. How could this happened? This is what it’s called competitiveness, because nobody could produce the same until some period of time. But as we know human being is a genius creature, either they will construct new source of electricity or they imitate existing product, the ultimate goal is reaching “Sustainable Competitive Advantage”. In this case we could say we keep the technology blueprint for ourselves using patent and keep the human capital happy with tons of incentives, and monopolized all the natural electricity source from the water to nuclear. There you go! A completely sustainable competitive advantage, but again this is the extreme example so it could easily understand☺. Secondly is according to the government, is removing LST (Luxuries Sales Tax), so more people will buy stuff, and hopefully the economy will move towards positive growth. In other hand this could leads to overconsumption syndrome, BUT! This policy is made to help our local industries, so they could compete, and in addition it will give them better position in the market. So that’s all for today folks! We’ll see you again soon! Stay awesome people!!

Quotes for today: "Opportunities don't happen. You create them." -Chris Grosser-

written by Ibnu