Deputy Minister Of Industry Claims That The Mamin Industry Is Not Affected By The 12 Percent VAT Increase

Deputy Minister of Industry Faisol Riza. Photo: Theresia Agatha/VOI

Deputy Minister of Industry (Wamenperin) Faisol Riza assessed that the increase in value added tax (VAT) to 12 percent will not have much effect on the food and beverage industry (Mamin). This is because the 12 percent VAT only targets luxury goods and services.

"As for the increase (VAT 12 percent) we have communicated with various industries, God willing, there will be little impact," said Faisol when met after the 2025 Kick Off 2nd Annual Indonesia Green Industry Summit (AIGIS) at the Ministry of Industry office, Jakarta, Wednesday, December 18.

Faisol said that the 12 percent increase in VAT was the government's response to the national economic situation which was not easy. Thus, the government tries to find a way out by not violating the regulations through tax increases.

On the other hand, he said, the government also understands that national economic conditions require strengthening. Mainly, so that the industry can produce normally and not be disturbed by VAT 12 percent.

"But I am sure that all of this is still in the same steps between industry and the government to be able to carry out the law's decisions while also maintaining the industrial economy," he said.

Previously, the government officially implemented a value added tax (VAT) of 12 percent on January 1, 2025.

Coordinating Minister for Economic Affairs Airlangga Hartarto said, in accordance with the mandate of the Law on Harmonization of Tax Regulations (UU HPP) that the schedule that has been determined at VAT rates will increase by 12 percent as of January 1, 2025.

"Next year's VAT will increase by 12 percent as of January 1, but the goods needed by the community are given facilities or 0 percent," he said at a press conference on the Economic Stimulus Package for Welfare, Monday, December 16.

Airlangga said that the group of goods exempted from VAT are basic necessities such as rice, meat, eggs, fish and milk. Likewise with education, health, financial services, labor and insurance and water.

He emphasized that in maintaining the purchasing power of the government community, it will continue to provide economic policy stimulus for low-income households, namely that the VAT rate will be borne by the government by 1 percent for basic goods so that it will still be subject to 11 percent.

Meanwhile, the basic goods that will be charged the VAT rate are 11 percent, namely cooking oil with Oilita packaging, wheat flour and industrial sugar.