Government Ensures Essential Goods Secured from VAT
- Istimewa
Jakarta, VIVA – Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized that certain essential goods and basic necessities will not be subject to the planned 12 percent Value-Added Tax (VAT) increase set to take effect on January 1, 2025.
As known, several leaders of Indonesia's House of Representatives discussed the VAT increase policy with President Prabowo Subianto at the Presidential Palace in Jakarta on Thursday (December 5).
"I can confirm that essential goods will not be subject to VAT," Minister Hartarto said.
Currently, education, healthcare, and transportation services are exempt from VAT. The minister reaffirmed that the government will not impose VAT increases on essential goods and necessities.
However, the 12 percent VAT increase will apply to luxury goods.
Sidang Paripurna DPR RI
- VIVA.co.id/M Ali Wafa
"Education costs are not subject to VAT. Healthcare costs are not subject to VAT. Transportation costs are also not subject to VAT. Most essential goods are already exempt from VAT. There will be many more items that will remain excluded from VAT," Minister Hartarto explained.
Earlier, it was reported that President Prabowo Subianto received leaders and members of the House of Representatives at the Jakarta Presidential Palace.
During the meeting, the House of Representatives discussed the planned 12 percent VAT increase scheduled for January 1, 2025, with President Prabowo.
Presiden RI Prabowo Subianto.
- YouTube Sekretariat Presiden
Deputy Speaker of the House of Relresentatives, Sufmi Dasco Ahmad, mentioned three key points raised during the discussion with President Prabowo.
Among them was that the 12 percent VAT would only apply selectively to luxury goods.
"So, it will be selective," said Dasco at the Presidential Office.
Secondly, regarding essential goods, he noted that services directly impacting the public will continue to be taxed at the current rate of 11 percent.
"As for the proposal from House of Representatives colleagues to reduce taxes on basic necessities directly affecting the public, the President responded that this would be considered and reviewed," he explained.
