VAT Continues To Rise In Several Products, The Directorate General Of Taxes Has Made An Agreement With Entrepreneurs

The Directorate General of Taxes (DGT) of the Ministry of Finance (Kemenkeu) has made an agreement with entrepreneurs regarding the payment of Value Added Tax (VAT).

"We agree that restitution is carried out by sellers who collect more VAT from consumers. What is the method? This is business to consumer (B2C), so they come back by conveying the receipts that have been brought so far," said Director General of Taxes Suryo Utomo at the 2024 State Budget Press Conference, in Jakarta, Monday.

According to Suryo, after the 12 percent VAT rate policy was only imposed on luxury goods, announced on December 31, 2024, his party met business actors to discuss adjustments that needed to be made. Business actors met include the Indonesian Employers Association (Apindo) and the Indonesian Chamber of Commerce and Industry (Kadin).

One of the discussions, namely regarding the adjustment of the administrative system, was considering that the policy announcement was made six hours before the implementation plan.

Moreover, the DGT regulates the VAT tariff policy for non-luxury goods using another tax imposition (DPP) of 11/12 percent so as not to violate the mandate of the law.

"With the use of other DPP values, automatically the administrative system of the perpetrators has also changed. In addition to the fact that taxes have already been collected," he said again.

There are two main points that are the agreement. First, DGT gives entrepreneurs three months to adjust their system.

Second, DGT will not impose sanctions on sellers if there is an error or delay in the issuance of invoices.

The two provisions have been regulated in the Regulation of the Director General of Taxes Number PER-1/PJ/2025 which was issued on January 3, 2025.

If there is an excess of VAT collection of 1 percent, from what should be 11 percent for non-luxury goods but after collecting 12 percent, buyers can ask the seller for a return.

Taxable entrepreneurs (PKP) sellers then replace the tax invoices to process the request for more payment returns.

On a separate occasion, the joint employers' association appreciates the Government's decision on the imposition of VAT rates only limited to luxury goods.

Chairman of the Apindo Domestic Trade Committee as well as in the capacity of the General Chairperson of Apregindo (Indonesian Global Brand Retail Entrepreneurs Association) Handaka Santosa assessed that the policy reflects the balance between the needs of the state and the interests of the community and business actors.

In addition, the three-month transition period given by the government is considered a wise step to provide time for the business world to prepare for the implementation of this policy optimally.

The technical socialization that will be carried out by the government and sectoral associations is also expected to ensure that the implementation of the policy runs smoothly.