Jakarta (ANTARA) - The Indonesian government has announced that the increase in value-added tax (VAT) rate from 11 percent to 12 percent will be officially applied, effective from January 1, 2025.
Coordinating Minister for Economic Affairs Airlangga Hartarto noted that implementation of the 12 percent VAT rate is in accordance with Law Number 7 of 2021 on Harmonization of Tax Regulations.
"As scheduled, the VAT rate next year will increase to 12 percent as of January 1," he noted in a press conference on economic policy packages in Jakarta on Monday.
Nevertheless, the government will continue providing the VAT exemption facility for strategic goods and services.
Hartarto explained that the government would exempt VAT for some staple and important goods, including rice, chicken meat, beef, several types of fish, chicken eggs, green chilies, red chilies, bird's eye chilies, and sugar.
Meanwhile, wheat flour, subsidized cooking oil Minyakita, and industrial sugar are given the one percent government-borne VAT facility, which means the VAT rate remains at 11 percent.
"In addition, there will be rice assistance of 10 kilograms per month for decile 1 and 2 (beneficiary families)," he added.
Furthermore, several strategic services also receive the VAT exemption facility based on Government Regulation Number 49 of 2024.
Those services include education services, medical services, social services, public transportation services, financial services, and public apartments and public houses' rent services.
The government proposed these tax facilities along with other fiscal incentive policy packages for 2025.
On the same occasion, Finance Minister Sri Mulyani Indrawati noted that the tax policy was determined while still paying attention to the principles of justice, support for the community, and mutual cooperation.
"Every act of collecting (taxes) must be carried out based on laws. Low-income groups will be protected or even provided with assistance," she affirmed.
Government to officially apply 12 percent VAT starting from January 1
Senin, 16 Desember 2024 16:02 WIB
Consumers make payments for purchases of goods that have been subject to 11 percent tax at a shopping center, Ciamis Regency, West Java, Tuesday (11/14/2023). (ANTARA FOTO/ADENG BUSTOMI/ADENG BUSTOMI)
