Starting January 1, 2025, the government will raise the Value Added Tax (VAT) rate from the current 11% to 12%. However, the Directorate General of Taxes stated that implementation will follow after the new government takes office. Law No. 7 of 2021 on Harmonization of Tax Regulations stipulates the VAT increase. According to the regulation, the VAT rate can be raised from 11% to 12% before January 1, 2025. The Director of Promotion, Services, and Public Relations of the Directorate General of Taxes stated that regarding the implementation timeline, they are guided by the mandate of the HPP Law, which is no later than January 1, 2025. Although the HPP Law regulates this, the Directorate General of Taxes will follow the instructions of the new government regarding the implementation of the 12% VAT. The Coordinating Minister for Economic Affairs also signaled that the VAT rate will increase to 12% next year. He did not provide specific answers on whether VAT will increase, but he stated that the next government will continue current government programs, including regulations passed during Jokowi's era. They see that the Indonesian people have made a choice, and that choice is sustainability. If sustainable, various programs launched by the government will certainly continue, including the VAT policy.
According to Law No. 7 of 2021, many goods and services are exempt from VAT. The list of VAT-exempt goods includes food and beverages provided by hotels, restaurants, and food stalls, as these are subject to regional taxes and regional levies (PDRD). This includes food and beverages provided in hotels, restaurants, eateries, stalls, etc., whether consumed on-site or off-site, including those provided by catering or food service businesses, which are subject to regional taxes and regional levies in accordance with regulations in the field of regional taxes and regional levies. In addition, items exempt from VAT include currency and gold bars used for national foreign exchange reserves, as well as securities. Furthermore, many services are also exempt from VAT, such as religious services, arts and entertainment services, hotel services, food service, and parking space provision services, which remain VAT-exempt as they are PDRD objects regulated by local governments. Catering or food service includes all food provision activities that are subject to regional taxes and regional levies in accordance with regulations in the field of regional taxes and regional levies.
Starting January 1, 2025, the government will raise the Value Added Tax (VAT) rate from the current 11% to 12%. However, the Directorate General of Taxes stated that implementation will follow after the new government takes office. Law No. 7 of 2021 on Harmonization of Tax Regulations stipulates the VAT increase. According to the regulation, the VAT rate can be raised from 11% to 12% before January 1, 2025. The Director of Promotion, Services, and Public Relations of the Directorate General of Taxes stated that regarding the implementation timeline, they are guided by the mandate of the HPP Law, which is no later than January 1, 2025. Although the HPP Law regulates this, the Directorate General of Taxes will follow the instructions of the new government regarding the implementation of the 12% VAT. The Coordinating Minister for Economic Affairs also signaled that the VAT rate will increase to 12% next year. He did not provide specific answers on whether VAT will increase, but he stated that the next government will continue current government programs, including regulations passed during Jokowi's era. They see that the Indonesian people have made a choice, and that choice is sustainability. If sustainable, various programs launched by the government will certainly continue, including the VAT policy.
According to Law No. 7 of 2021, many goods and services are exempt from VAT. The list of VAT-exempt goods includes food and beverages provided by hotels, restaurants, and food stalls, as these are subject to regional taxes and regional levies (PDRD). This includes food and beverages provided in hotels, restaurants, eateries, stalls, etc., whether consumed on-site or off-site, including those provided by catering or food service businesses, which are subject to regional taxes and regional levies in accordance with regulations in the field of regional taxes and regional levies. In addition, items exempt from VAT include currency and gold bars used for national foreign exchange reserves, as well as securities. Furthermore, many services are also exempt from VAT, such as religious services, arts and entertainment services, hotel services, food service, and parking space provision services, which remain VAT-exempt as they are PDRD objects regulated by local governments. Catering or food service includes all food provision activities that are subject to regional taxes and regional levies in accordance with regulations in the field of regional taxes and regional levies.