Heaptalk, Jakarta — The Indonesian Chamber of Commerce and Industry (Kadin) has expressed positive appreciation for the government’s decision to increase the Value-Added Tax (VAT) rate to 12%. The tax will apply only to luxury goods and services previously subject to the Luxury Goods Sales Tax (PPnBM).
In a recent written press release, Kadin Indonesia Chairman Arsjad Rasjid stated that imposing a 12% VAT exclusively on luxury goods and services consumed by the upper class is a strategic move that will help maintain the purchasing power of the middle class.
“This policy provides room for the national industry to remain competitive while promoting the sustainable growth of an inclusive economy,” said Arsjad.
Suryadi Sasminta, Deputy Chairman for Fiscal and Public Policy at Kadin Indonesia, acknowledged the business community’s complete understanding of the calculation and invoicing procedures changes stipulated in Minister of Finance Regulation (PMK) Number 131 of 2024.
“We also appreciate the government for granting a three-month transition period for preparation,” Suryadi noted.
For businesses that have already implemented the 12% VAT rate, Suryadi encouraged them to refund customers the 1% tax excess by government directives.
“The business community recognizes the increasing importance of tax revenue for the state, particularly in achieving the target economic growth of 8%. For this reason, as a government partner, Kadin Indonesia and all industry associations are ready to collaboratively assess and implement efficient and effective tax policies to support the attainment of national economic growth targets,” he concluded.
