Sri Mulyani On VAT 12 Percent Applies To Luxury Goods: The Category Is Very Few, Limited

Minister of Finance Sri Mulyani Indrawati. (Photo: Doc. ANTARA)

JAKARTA - The government continues to implement a policy of increasing the value added tax rate (VAT) from 11 percent to 12 percent in 2025.

However, this VAT tariff adjustment only applies to luxury services and goods.

Minister of Finance Sri Mulyani Indrawati explained that the increase in VAT rates of 12 percent in 2025 only applies to goods and services which are currently subject to a luxury goods sales tax tariff (PPnBM) as stated in the Minister of Finance Regulation (PMK) Number 15 of 2023.

"There are very few categories, limited such as private jets, cruise ships and also very luxurious houses that have been regulated in PMK PPnBM Number 15 of 2023," Sri Mulyani said at the Press Conference, Tuesday, December 31.

Therefore, Sri Mulyani emphasized that other goods and services that have been affected by VAT by 11 percent will not increase VAT to 12 percent.

"So still 11 percent of all goods and services, which so far have been 11 percent, still 11 percent have not increased VAT for all goods and services which have been fixed. Goods and services that have received exceptions are 0 percent VAT, which is not paying VAT at all, namely goods related to staple foods," he said.

Sri Mulyani explained 0 percent VAT tariff goods/services, namely, Rice, Corn, Soybeans, Fruits, Vegetables, Sweet potatoes, Wood potatoes, Sugar, Livestock and the results, fresh milk, Unggas, Slaughter Results, Rice-Padian, Nuts, Fish, Shrimp, Other Biotas, Seaweed, Train Tickets, airport tickets, and people's Transport.

Next, goods and services that remain subject to 0 percent VAT rates are such as Public Transportation Services and Rivers, Submission of Package Services, Travel Bureau Services, Government and Private Education Services, Textbooks, Holy Books, Health Services, Pension Fund Financial Services, Other Financial Services such as Credit Cards, Losses Insurance, and Life Insurance.

"All of them still get 0 percent VAT facilities and do not pay VAT, while all other service goods, which so far have remained 11 percent, have not been affected by an increase of 12 percent," he explained.

The following are the details of luxury goods affected by PPnBM rates based on PMK 15/2023:

1. Luxury residential groups such as apartments, condominiums, town houses and the like at a selling price of IDR 30 billion.

2. Driverable group of air balloons, other aircraft without propulsion; firearms group except for state purposes, bullets and parts, does not include air rifle bullets.

3. Aircraft groups that are subject to a rate of 40 percent except for state or commercial transportation purposes such as helicopters, aircraft and other air vehicles, in addition to helicopters.

4. Groups of firearms and other firearms, except for state purposes such as artillery weapons, revolvers and pistols, firearms (in addition to artillery weapons, revolvers and pistols) and such equipment operated with explosives firing.

5. Luxury cruise groups, (seventy five percent except for state purposes) or public transportation cruise ships, excursion ships, and such water vehicles are primarily designed for the transportation of people, ferries of all types, except for the benefit of the state or public transportation, Yacht, except for the benefit of the state or public transportation or tourism businesses.