Heaptalk, Jakarta — Minister of Finance Sri Mulyani stated that Indonesia’s value-added tax (VAT) is still relatively low compared to countries worldwide, even though it has increased to 12%.
“VAT in Indonesia, compared to various countries, is still relatively low. Whether in emerging countries, regional countries, or G20 countries,” said Sri Mulyani.
Sri Mulyani also compared Indonesia’s VAT rate with that of developing countries. She added, “Brazil has the highest VAT rate of up to 17% in developing countries, and the country has a tax ratio of 24.67%.”
Next is South Africa, with a VAT rate of 15% and a tax ratio of 21.4%. This is followed by India, with a VAT rate of 18% and a tax ratio of 17.3%. Turkey has a VAT rate of 20% and a tax ratio of 16%. Mexico has a VAT rate of 16% and a tax ratio of 14.46%.
However, based on the same data, Indonesia’s VAT rate is considered high compared to other Southeast Asian countries. Currently, the Philippines sets the highest VAT rate in Southeast Asia at 12%. Indonesia follows with a rate of 11% before finally increasing it by 1% next year.
Thus, Indonesia’s VAT rate will become one of the highest in ASEAN, along with the Philippines’. Below, Indonesia, Vietnam, and Malaysia set VAT rates at 10%. Singapore has a VAT rate of 9%, and Thailand has a rate of 7%.