2025 Taxation Target Agreed to Remain at IDR 2,490.91 trillion, House of Representatives: No VAT Increase

JAKARTA. The government and the House of Representatives Budget Committee (Banggar DPR) agreed to set the tax revenue target in the 2025 Draft State Budget (RAPBN) at IDR 2,996.9 trillion.

In other words, the DPR approved the government's proposed tax revenue target as presented in the 2025 Financial Note and Draft State Budget. Furthermore, the target will be discussed at the plenary level to be stipulated as the 2025 State Budget.

In detail, the tax revenue target consists of Income Tax of IDR 1,209.3 trillion, Value Added Tax and Sales Tax on Luxury Goods (VAT and STLG) of IDR 945.1 trillion, Land and Building Tax (L&B tax) of IDR 27.1 trillion and other taxes of IDR 7.8 trillion.

No 12% VAT Increase

Quoting cnbcindonesia.com, Chairman of the House of Representatives Budget Committee Said Abdullah revealed that the VAT and STLG target was set without considering the increase in the VAT rate from 12% even though it had become a mandate of the Harmonization of Tax Regulations (HPP) Law.

This means that the VAT revenue target of IDR 945.1 trillion still uses the baseline rate of 11% as it currently applies.

The increase in the VAT rate will be the authority of the new government, which will be led by the president-elect for the 2024-2029 period Prabowo Subianto, after going through a consultation process with the House of Representatives.

This was confirmed by the Head of the Ministry of Finance's Fiscal Policy Agency (BKF Kemenkeu) Febrio Kacaribu, who said that the decision on the VAT rate awaits discussions that will be held by the new government.

However, he assessed that the government needs to carry out extensification and intensification to boost tax revenue. (ASP/KEN)