Retailers Association Make Sure Its Members Don't Wear 12 Percent VAT

Photo: Doc. Antara

JAKARTA - Chairman of the Indonesian Retail Entrepreneurs Association (Aprindo) Solihin ensured that none of its members would change the Value Added Tax Rate (VAT) system to 12 percent.

"I have checked that none of those who joined Aprindo set (settings/ordering) to 12 percent. The retail I have is up to 20 thousand, but no one sets 12 percent," said Solihin, in Jakarta, quoted by Antara, Friday, January 3.

Solihin said that before President Prabowo Subianto officially announced the increase in VAT rates from 11 percent to 12 percent, specifically for luxury goods and services which took effect on January 1, 2025, retailers had indeed made preparations for price changes.

After the announcement was read, said Solihin again, Aprindo members continued to follow the old regulatory system because there were no changes.

According to him, retailers always comply with applicable regulations, in this case the Minister of Finance Regulation (PMK) Number 131 of 2024 which regulates that the 12 percent VAT rate is only imposed on luxury goods.

"We have indeed prepared a price tag but not used. So we follow what is conveyed to the government, so if we find the retailer of Aprindo members who raises the price, we can report it to me," said Solihin.

The government officially set the increase in VAT from 11 percent to 12 percent in 2025 only applies to luxury goods and services.

The goods and services charged with the 12 percent VAT rate are goods and services listed in the Minister of Finance Regulation (PMK) Number 15 of 2023 concerning the Imposition of Sales Tax on Luxury Goods (PPnBM).

"Well, there are very few categories, limited, namely goods such as private jets, cruise ships, and also very luxurious houses whose value has been regulated in the PMK regarding VAT on luxury goods Number 15 of 2023," said Finance Minister Sri Mulyani Indrawati at a press conference in Jakarta, Tuesday 31 December.

He detailed that the luxury goods and services worn by VAT were 12 percent, including the first luxury housing group such as luxury houses, apartments, condominiums, town houses, and the like with a selling price of Rp. 30 billion or more.