Indonesia Announced VAT-Exempt Goods and Services
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Jakarta, VIVA – Indonesian President Prabowo Subianto emphasized that the increase in the Value Added Tax (VAT) rate to 12 percent, effective January 1, 2025, will only apply to luxury goods.
Meanwhile, goods and services essential to the public will remain exempt from VAT or subject to a zero percent VAT rate.
Finance Minister Sri Mulyani Indrawati stated that goods and services currently enjoying a zero percent VAT rate will continue to be exempt from the 12 percent VAT increase.
These include basic commodities, train tickets, and transportation services.
"Goods and services that have previously been exempt, meaning they are subject to zero percent VAT, will not be charged VAT at all. These are goods related to basic needs," the minister said on Wednesday (January 1).
Minister Indrawati elaborated that the basic goods exempt from VAT include rice, corn, soybeans, fruits, vegetables, sweet potatoes, cassava, sugar, livestock and its by-products, fresh milk, poultry, processed meat products, peanuts, other legumes, grains, fish, shrimp, other aquatic species, and seaweed.
Menteri Keuangan, Sri Mulyani Indrawati
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Additionally, train tickets, airport tickets, passenger transportation, public transport services, river and ferry transport services, and certain large-scale package delivery services are also exempt.
Other exempt services include freight forwarding, travel agency services, educational services (both government and private), and textbooks or religious scriptures.
The minister also noted that zero percent VAT applies to healthcare services, including public and private medical services, financial services, pension funds, and other financial services.
"Other financial services such as financing, receivables, credit cards, property insurance, life insurance, and reinsurance will continue to benefit from the zero percent VAT facility," she concluded.
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