Jakarta (ANTARA) - Energy and Mineral Resources Minister Bahlil Lahadalia has said that the increase in the value-added tax (VAT) rate from 11 percent to 12 percent will not affect fuel prices.
At a press conference here on Thursday, the minister assured that fuel prices are stable and will not increase due to policy changes on VAT rates.
"There is no issue in VAT for fuel, (the prices) will remain stable," Lahadalia said.
The government will officially apply the 12 percent VAT from January 1, 2025.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, said that the implementation of the 12 percent VAT rate is in line with Law Number 7 of 2021 on the Harmonization of Tax Regulations.
"As scheduled, the VAT rate next year will increase to 12 percent as of January 1," he informed at a press conference on economic policy packages in Jakarta on Monday.
However, the government will continue the VAT exemption facility for strategic goods and services.
Hartarto said that the government will exempt some staple and important goods from VAT, 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 will get the one percent government-borne VAT facility, meaning, the VAT rate for those commodities will effectively remain 11 percent.
Several strategic services will also be exempt from VAT based on Government Regulation Number 49 of 2024.
Those services include educational services, medical services, social services, public transportation services, financial services, and public apartment and public house rental services.
The government has proposed these tax facilities along with other fiscal incentive policy packages for 2025.
Finance Minister Sri Mulyani Indrawati said that the tax policy was determined while 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.
