Indonesia Unveils Economic Package: VAT Hike for Luxury Goods
Indonesia Unveils Economic Package, Including VAT Changes
Jakarta – Indonesia is set to announce a extensive economic policy package on Monday, including details on a revised value-added tax (VAT) rate, according to Coordinating Minister for Economic Affairs Airlangga Hartarto. The announcement follows a meeting between Hartarto and President Prabowo subianto.
While the government previously indicated a plan to increase the VAT rate to 12% from the current 11% in January 2025,Hartarto clarified that the increase would only apply to luxury goods. This targeted approach aims to support low-income individuals by exempting essential items from the higher tax rate.
“there will be certain tariffs, but staple goods would not be subject to VAT,” hartarto told reporters on Friday.
The economic package is expected to include additional measures, such as fiscal stimulus for labor-intensive industries and assistance programs to help low-income households cover electricity bills.
Indonesia’s VAT Hike to Target Luxury Goods Only, Says Econ Minister
Jakarta: In a move aimed at buffering low-income households from inflationary pressures, Indonesia’s upcoming economic policy package will see a VAT rate increase applied only to luxury goods. This clarification, made by coordinating Minister for Economic Affairs Airlangga Hartarto following a meeting with President Prabowo Subianto, comes after previous indications of a broader VAT hike to 12% from the current 11% in January 2025.
Hartarto emphasized the government’s commitment to shielding essential goods from the tax increase, stating, “there will be certain tariffs, but staple goods would not be subject to VAT.” He further elaborated that the comprehensive economic package will encompass additional measures such as fiscal stimulus for labour-intensive industries and programs designed to assist low-income families with electricity bill payments. The full details of the package are expected to be unveiled on Monday.