JAKARTA - President Prabowo Subianto emphasized that the increase in Value Added Tax (VAT) rates from 11 percent to 12 percent in 2025 specifically applies to luxury goods.
"Today the government has decided that the increase in VAT rates from 11 percent to 12 percent is only imposed on luxury goods and services," he said at a press conference, Tuesday, December 31.
According to Prabowo, the 12 percent increase in VAT in 2025 is in accordance with the order of Law Number 7 of 2021 concerning Harmonization of Tax Regulations (UU HPP).
"I feel the need that to convey this 12 percent VAT article on our own. So we have all increased the value added tax rate to 12 percent, this is a mandate, which is an order from Law number 7 of 2021 concerning the harmonization of tax regulations," he explained.
Prabowo said the 12 percent increase in VAT in 2025 was an agreement with the DPR and was carried out in stages starting from 11 percent in 2021 and 12 percent in 2025.
"So according to the agreement between the government of the Republic of Indonesia and the DPR in 2021, the tariff increase will be carried out in stages, from 10 percent to 11 percent starting April 1, 2022, this has been implemented and then the order of the Law from 11 percent to 12 percent on January 1, 2025," he explained.
Prabowo said the purpose of increasing VAT was carried out in stages so as not to have a significant impact on people's purchasing power, inflation, economic growth and for economic equality.
Previously, President Prabowo Subianto suddenly went to the Ministry of Finance (Kemenkeu) office at the end of 2024 and the launch of the coretax, on Tuesday, December 31.
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Based on VOI's monitoring, Prabowo was present using a white presidential car, namely Maung Pindad.
The meeting was attended by Minister of Finance Sri Mulyani, Deputy Minister of Finance Suahasil Nazara, Deputy Minister of Finance Thomas Djiwandono, Deputy Minister of Finance Anggito Abimanyu and along with all levels of the Ministry of Finance.
The meeting is routinely held by the Ministry of Finance every turn of the year.
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