- Indonesia’s Value Added Tax (PPN) may increase to 12% in 2025, making it the highest in Southeast Asia
- Finance Minister Sri Mulyani stated that the increase aligns with tax regulations and there are no plans to postpone it
- Despite concerns about weakening purchasing power, a healthy state budget is necessary to absorb economic shocks
- Indonesia’s current PPN rate is the second highest in Southeast Asia, with Brunei being the only country without it
- The proposed tax increase has faced criticism, with concerns about its impact on Micro, Small, and Medium Enterprises
- PPN and luxury goods sales tax are significant contributors to Indonesia’s tax revenue, making up 40.88% of total revenue as of October 2024.
Source: indonesiaexpat.id
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.
