- Indonesia will confirm an increase in the value-added tax rate to 12% next week
- The current VAT rate is 11% and the increase is scheduled for January
- Airlangga Hartarto, Indonesia’s Coordinating Minister for Economic Affairs, announced the decision
- There is significant public pressure to delay the VAT increase due to concerns about its impact on spending power
- Indonesian businesses and unions have requested a pause on the VAT hike due to a deteriorating economic environment
- The government argues the VAT increase is necessary to enhance the structural health of the budget
- A state bank has indicated that the VAT hike will have a minimal impact on growth
- The government plans to introduce fiscal stimulus to support the labor-intensive industry affected by layoffs and slowing global demand growth
Source: reuters.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.
