Indonesia’s Ministry of Finance has announced that the House of Representatives approved the Law on the Harmonization of Tax Regulations on 7 October 2021, which contains the tax reform measures recently agreed to with the government for the 2022 Budget. The measures include:
- An increase in the standard VAT rate from 10% to 11% from 1 April 2022 with a further increase to 12% from 1 January 2025;
- The removal of VAT exemptions so that only certain goods and services are exempt, including basic goods that are necessary for the community, as well as health services, educational services, social services, and certain other services;
- The introduction of a new carbon tax from April 2022 based on market pricing per kg of CO2 equivalent on goods and activities with greenhouse gas emissions, with a floor rate of IDR 30 per kg that will initially apply for coal power plants; and
- The introduction of a tax amnesty program that will be available from 1 January to 30 June 2022.
Source Orbitax
For all other newsitems related VAT rate increase in Indonesia, click HERE
