Suara.com – The government is reportedly immediately raising value added tax (VAT) to 12 percent in 2025. This was revealed after the Coordinating Ministry for Economic Affairs explained the government's future policy plans.
Including, the program from the era of President Joko Widodo or Jokowi which was continued by the next elected president. Referring to Article 7 paragraph 1 of the Law on Harmonization of Tax Regulations (UU HPP), the VAT rate which was previously 10 percent was changed to 11 percent with effect from 1 April 2022. VAT then increased again to 12 percent on 1 January 2025 or sooner.
According to the Coordinating Minister for the Economy, Airlangga Hartarto, this decision was a response to the people's choice to support President Jokowi's sustainability program. Airlangga stated this in a media briefing at the Office of the Coordinating Ministry for the Economy, Newsdelivers.com, Friday (8/3/2024).
Airlangga Hartarto. (Suara.com/Novian)
He emphasized that the government has the authority to change the VAT rate to a minimum of 5 percent and a maximum of 15 percent. This can be done through the issuance of government regulations after discussions with the DPR, as stipulated in Article 7 paragraph 3 of the VAT Law.
However, the Head of the Fiscal Policy Agency (BKF), Febrio Kacaribu, previously said that now is not the right time to increase the VAT rate to 12 percent due to increasingly uncertain economic conditions.