If a country's inflation is high, the government may consider raising taxes, including Value Added Tax (VAT), to reduce the budget deficit and increase state revenue. However, this policy can have negative impacts on society, especially on the lower-middle economic groups.

*Impact of Tax Increase on Society:*

- *Decrease in Purchasing Power*: Tax increases can raise the prices of goods and services, thereby reducing the purchasing power of the public.
- *Increase in Poverty*: The group of poor people will be more affected because their proportion of spending on basic needs is very high.
- *Psychological and Social Pressure*: The rising tax burden in the midst of difficult situations can lead to anxiety, frustration, and social conflict.

*Strategy to Overcome Negative Impacts:*

- *Subsidies and Incentives*: Providing subsidies for basic necessity goods and incentives for MSME actors.
- *Social Assistance*: Strengthening social assistance programs such as Direct Cash Assistance (BLT) to protect vulnerable community groups.
- *Local Product Promotion*: Supporting the consumption of local products by providing incentives for MSME players and the "Proudly Made in Indonesia" campaign.
- *Public Education*: Increasing public understanding of the long-term benefits of the rise in VAT rates and how the proceeds are used for national development.¹

In the context of high inflation, the government needs to carefully consider the impact of tax increases on society and the economy. Fiscal policies that are not sensitive to social and economic conditions can exacerbate the suffering of the people and weaken the economy. (Meta AI)

Hopefully the tax reduction occurs in the fourth quarter of this year.