Published on 02/01/2025 GMT+7 Reading time 2 minutes
Coordinating Minister for Political and Security Affairs, Budi Gunawan, said President Prabowo Subianto gave a special gift for New Year's Eve 2025 to Indonesia by cancelling the planned increase of Value-added Tax (VAT) to 12 percent.
"As the message of the President, Pak Prabowo Subianto before the turn of the year, that all Indonesian people will be given grace, goodness, peace, and prosperity. So, at the beginning of this year, the President also gave a special gift in the form of the cancellation of the VAT increase from the planned 12 percent and maintain it at the current 11 percent," he said on Wednesday, January 1, 2025.
Budi cited that the 12 percent VAT is only for luxury goods and services by the wealthy upper class. However, basic necessity goods will remain at 0 percent.
"Hopefully with this decision the public will not need to worry because the government will continue to strive to improve the welfare of the people and realize an increasingly advanced Indonesia in the future," he said.
Previously, President Prabowo Subianto had confirmed VAT increase from 11 percent to 12 percent only for luxury goods and services, which was proposed to be enacted starting Wednesday, January 1, 2025. Prabowo gave examples such as private jets, yachts, and houses with high value that would be subjected to the VAT.
"The increase in VAT from 11 percent to 12 percent is only imposed on luxury goods and services," Prabowo told a press conference at the Ministry of Finance in Jakarta, on Tuesday, December 31, 2024.
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