Jakarta – The latest update on the plan to raise the Value Added Tax (VAT) to 12% comes after a meeting between the leadership and members of the Indonesian House of Representatives (DPR) with President Prabowo Subianto. The DPR’s proposal regarding the 12% VAT is that it will only be imposed on luxury goods.
The outcome of the meeting between the DPR leadership and President Prabowo was conveyed by the Deputy Speaker of the DPR, Sufmi Dasco Ahmad, at the Presidential Palace in Jakarta on Thursday (5/12/2024). Dasco stated that the DPR proposed the 12% VAT to be applied only to luxury goods, selectively.
“First, the 12% VAT will only be applied to luxury goods, so it will be selective,” said Dasco.
Next, basic goods that are essential for the public’s needs will not be subject to the 12% VAT. These goods are proposed to still be taxed at the current VAT rate of 11%.
“Second, basic goods and services directly affecting the public will continue to be taxed at the current rate of 11%,” he explained.
“Regarding the proposal from our colleagues in the DPR to reduce the tax on basic needs directly affecting the public, the President responded earlier that it will be considered and reviewed,” he added.
Dasco mentioned that in the near future, President Prabowo will communicate with Finance Minister Sri Mulyani to review the public’s proposal, which suggests that VAT should be lowered.
“Perhaps within the next hour, the President will ask the Finance Minister and several other ministers to meet and review the proposals from the public and the DPR regarding certain taxes that need to be reduced,” he said.
Meanwhile, Minister of State Secretary Prasetyo Hadi, during the same occasion, emphasized that the government will respond promptly to input directly received from the public.
“Any input from the public, especially from the DPR, regarding matters that concern the public’s interests, will be responded to quickly,” said Prasetyo.
