The Increase of VAT Rate to 12% is the New Government's Authority

Thursday, 23 May 2024

The Increase of VAT Rate to 12% is the New Government's Authority

JAKARTA. The decision to implement the Harmonization of Tax Regulations (HPP) Law related to the increase in the Value Added Tax (VAT) rate to 12%, will be the new government's responsibility. The current government under Joko Widodo will not revise this provision.

Quoting, Minister of Finance Sri Mulyani Indrawati stated that the decision to continue the plan to increase VAT to 12% before January 2025 will be handled by the new government.

This was revealed after Sri Mulyani delivered the Macro Economic Framework and Fiscal Policy Principles (KEM PPKF) at the House of Representatives (DPR) Plenary Meeting, on Monday (20/5). The KEM PPKF is the basis for the preparation of the 2025 Draft State Budget.

However, Sri Indrawati said that her party would continue to coordinate with the transition team of the new government, which will be led by President-elect Prabowo Subianto, in formulating policies in 2025.

Read: Rate Rises, Minister of Finance Releases List of 11 Transactions of Value-Added Tax Object

The substance contained in the KEM PPKF includes basic macroeconomic assumptions and the general budget posture that will be used for 2025.

Previously, the Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that one of the considerations for delegating the decision was so that the new government had room to make adjustments to the program to be implemented. (ASP/KEN)


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