President Prabowo Affirms Implementation Of VAT 12 Percent In Accordance With Law But For Luxury Goods

President Prabowo Subianto/PHOTO via Instagram @prabowo

JAKARTA - President Prabowo Subianto emphasized that the policy of implementing a 12 percent Value Added Tax (VAT) which is valid from 2025 will be implemented in accordance with the law, but is selective.

Prabowo said the increase in VAT would only apply to luxury goods, while the protection of the people remains a priority for the government.

"We have been given an explanation, VAT is a law, yes we will implement it, but selective only for luxury goods," Prabowo said, after meeting with the delegation of the Global Alliance for Vaccines and Immunization (GAVI) as reported by ANTARA, Friday, December 6.

President Prabowo also explained that since the end of 2023, the government has not collected full VAT on goods that should be taxed, as a form of effort to help the community, especially the lower class.

"For the other people, we will protect it, since the end of 2023 the government has not collected what should be collected to defend, help the small people. So even if it goes up, it's only for luxury goods," he said.

The 12 percent VAT provision was ordered by Law Number 7 of 2021 concerning Harmonization of Tax Regulations.