- President Prabowo Subianto announced a VAT increase from 11 percent to 12 percent starting January 1, 2025
- The VAT increase will only affect luxury goods and services such as private jets, yachts, and luxury homes
- Essential goods and services like rice, meat, and healthcare will continue to be exempt from VAT
- The government introduced a stimulus package worth Rp 38.6 trillion to support the economy
- The package includes rice assistance for households, electricity discounts, and tax incentives for workers and small businesses
- The VAT increase aligns with the 2021 tax harmonization law and aims to balance fiscal needs with public purchasing power protection
- The government aims to maintain economic growth and control inflation while adjusting VAT rates
- Reactions to the VAT increase have been mixed, but the government emphasizes its commitment to a fair taxation system and keeping essential goods affordable
Source: jakartaglobe.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.
