Sri Mulyani Imposes VAT On Hajj And Umrah Packages, Here Is The Rate

JAKARTA - The government through the Ministry of Finance imposes a value added tax (PPN) on services for organizing religious worship, such as hajj along with trips to other places. This provision has been in effect since April 1, 2022.

The provisions for the imposition of VAT are stated in the Minister of Finance Regulation (PMK) Number 71/PMK.03/2022 concerning VAT on the Delivery of Certain Taxable Services. VAT is levied on a number of taxable services, such as package delivery services, travel agencies, to the organization of religious worship trips.

"Certain Taxable Services [including]: services for organizing religious worship trips that also organize trips to other places in accordance with the provisions of the legislation governing the criteria and/or details of religious services that are deemed not subject to VAT," it is written in PMK 71 /2022.

Head of the Sub-Directorate of VAT, Trade, Services, and Other Indirect Taxes, Directorate General of Taxes, Ministry of Finance Bonarsius Sipayung explained that there is no VAT imposition on travel whose purpose is only for religious worship.

VAT is withdrawn if there are other destinations as a package of the religious trip. For example, people do not need to pay VAT for Umrah trips to Mecca, even though there is a tariff of 0.5 percent of the total accommodation cost. VAT is only imposed if the Umrah package includes other trips that are not part of religious worship.

"When the Umrah is mixed, for example, stopping to Turkey, what stopover, how much is the cost of Umrah. Those going to Mecca are still 0.5 percent, those to Turkey are 1 percent. Just like the others, travel agency services are subject to VAT," said Bonar on Wednesday (6/4/2022).

According to him, religious worship trips will still be excluded from the imposition of VAT. PMK 71/2022 only changes the VAT rate for travel services to other destinations, does not replace the essence of the previous rule, namely PMK Number 92/PMK.03/2020 concerning Criteria and/or Details of Religious Services that are Not Subject to VAT.

The new VAT rate for services for organizing religious worship along with trips to other places is 1.1 percent, which is multiplied by the selling price of the package for organizing trips to other places if the bill is broken down between religious worship trips and trips to other places.

The 0.55 percent VAT rate applies if the package selling price is not specified between the two types of trips. PMK 92/2020 regulates the types of religious worship travel services by travel agencies that are not subject to VAT. The following are the details according to Article 4 paragraph (3):

1. Special Hajj and/or Umrah to the cities of Mecca and Medina for Muslim travel participants

2. Worship to the city of Jerusalem and/or the city of Sinai for Christian travel participants

3. Worship to the Vatican and/or the city of Lourdes for Catholic travel participants

4. Worship to the city of Uttar Pradesh and/or the city of Haryana for Hindu travel participants

5. Worship to the city of Bodh Gaya and/or the city of Bangkok for Buddhist travel participants

6. Worship to the city of Qufu for Confucian religious travel participants