featured-image

Indonesia's Value-Added Tax (VAT), the equivalent to Singapore's Goods and Services Tax (GST), is slated to hit 12 per cent at the start of 2025, matching it with the Philippines as the highest in Southeast Asia. However, according to Prabowo Subianto, the newly inaugurated president, the 1 per cent increase will only be applied selectively for "luxury goods". One per cent increase Indonesia's VAT was initially set at 11 per cent for sales of goods and services, but Reuters reported that in December 2024, Indonesia's government confirmed it would increase VAT by 1 per cent.

This is the latest increase in recent years, with VAT being increased from 10 per cent in April 2022 to 11 per cent. Indonesia's government said that the 2024 increase was needed to "improve the structural health of the budget" and that the Indonesian State Bank expected that it would only have a "small impact on growth". The exact details of the increase are due to be released this week, according to Coordinating Minister for Economic Affairs Airlangga Hartarto.



Airlangga is one of the senior politicians that Prabowo has retained for his predecessor Joko "Jokowi" Widodo's government, and has headed his ministry since 2019, and was previously the minister of industry. Re-reviewed The tax increase was first mooted in March 2012 by the former president, and its retention, along with that of ministers like Airlangga is a reflection of Prabowo's commitment to Jokowi's legacy. But Indonesian commentators are un.

Back to Luxury Page