- President Prabowo Subianto announced an increase in VAT from 11 percent to 12 percent starting January 1, 2025
- The increase applies only to luxury goods and services such as private jets, cruise ships, yachts, motor yachts, and very luxurious houses
- Goods and services not considered luxury will maintain their current VAT rate of 11 percent, unchanged since 2022
- The gradual VAT increase aims to minimize impact on purchasing power, inflation, and economic growth
- The change aligns with Law Number 7 of 2021 on the Harmonization of Tax Regulations
- Finance Minister Sri Mulyani Indrawati detailed incentives in the Economic Stimulus Package following the VAT adjustment
- Essential goods and services like basic food items, education, and health remain VAT-free or at zero percent
- Low-income households receive additional support with a one percent government-borne VAT on essential goods, keeping their VAT rate at 11 percent
Source: en.antaranews.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.
