Indonesia to impose 12% VAT from 2025

The Indonesian Government plans to apply a 12% value-added tax (VAT) next year, marking a 1 percentage point increase from the current rate, according to a senior official.

Monday, March 11, 2024 14:25

Indonesia to impose 12% VAT from 2025 ảnh 1

Illustrative image (Photo: jakartaglobe.id)

Jakarta (VNA) - The Indonesian Government plans to apply a 12%value-added tax (VAT) next year, marking a 1 percentage point increase from thecurrent rate, according to a senior official.

Chief Economic Minister Airlangga Hartarto saidthat this adjustment is in accordance with the law on the harmonisation oftaxation regulations issued in 2022.

The 2022 law mandates the phasedimplementation of VAT hikes, with the 12% rate set to be imposed byJanuary 1, 2025, at the latest. The VAT was previously raised from 10% to 11% on April 1, 2022.

Airlangga said the government is currentlyformulating macro-economic and fiscal policies, including the new VAT rate, asthe basis for drafting the 2025 state budget.

While the new VAT rate is expected to booststate revenues, the final 2025 draft budget won’t be ready before the GeneralElection Commission (KPU) formally announces the winner of the presidentialelection scheduled for March 20, Airlangga explained./.

VNA

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