VAT Tariffs Increase To 12 Percent In 2025, Airlangga: Depends On New Government Decisions

JAKARTA - The government plans to increase the value added tax rate (VAT) to 12 percent by 2025. The tariff adjustment has been stated in Law Number 7 of 2021 concerning Harmonization of Tax Regulations (UU HPP).

Coordinating Minister for Economic Affairs Airlangga Hartarto conveyed that the decision to increase VAT to 12 percent by 2025 will wait for the next government's decision, namely the presidential and vice presidential candidate pair Prabowo Subianto-Gibran Rakabuming Raka.

"Regarding VAT, the HPP Law has been running so far, the HPP Law sounds like that, but what will be decided depends on what the government will do with the program," said Airlangga after the Inclusive Financial National Council Coordination Meeting (DNKI) Friday, March 22, 2024.

Menurut Airlangga, if indeed the new government agrees to implement a 12 percent VAT tariff policy at the beginning of next year, then the policy will be included in the 2025 State Budget Law.

"What will be decided by the government, the government will include it in the APBN Law, so we'll see if the APBN Law can make policies related to the VAT number," he explained.

When asked by the media crew whether they had communicated with the Prabowo-Gibran pair regarding the implementation of the 12 percent VAT rate policy at the beginning of next year, Airlangga said there was no impact regarding the plan to increase VAT by 12 percent.

"It depends on what the government's program will be, it will be discussed next," he explained.