- Indonesia will increase the VAT rate on luxury goods to 12% starting in 2025
- The current VAT rate on luxury goods is 11%
- The VAT rate for other goods, including some staples, will remain at 11%
- The increase was approved by President Prabowo Subianto on 6 December 2024
- The proposal for the VAT increase came from Indonesia’s parliament
- The aim of the VAT hike is to improve the structural health of the budget
- A fiscal stimulus is planned to accompany the new VAT rate
- This tax increase is part of Prabowo’s broader plan to raise tax revenue from 10% to 18% of GDP, potentially adding USD 100 billion to the budget
Source: regfollower.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
