Finance Ministry Clarifies VAT to Remain a 11% Next Year
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20 September 2023 21:58 WIB
TEMPO.CO, Jakarta - The Indonesian Ministry of Finance assured that the standard value-added tax (VAT) will remain at 11 percent in 2024. The ministry’s head of the budget policy center, Wahyu Utomo, made the statement in response to growing concerns over the VAT hike to 12 percent.
Wahyu explained that the increase in VAT to 12 percent is included in the Tax Harmonization Law which will take effect no later than 2025.
“It's not 2025 yet, so I won't answer it yet,” Wahyu said in a mini talk show in Jakarta on Wednesday, September 20, 2023. "But, the point is that in 2024, the VAT will still be 11 percent.”
Josua Pardede, a chief economist at Bank Permata, said Indonesia's economy was still driven by household consumption, which would eventually affect the value-added tax. He also said it was middle and upper-class households that boost consumer spending.
“Specifically, 45 percent of them are upper-class households, 30 percent of them are middle-class households, and less than 20 percent of them are lower middle-class households,” Josua outlined on the same occasion.
In other words, he assessed that middle and upper-class households saw consumption growth. Moreover, the public mobility restrictions or PPKM during the COVID-19 pandemic have been lifted. “They can now spend money on travel,” Josua said.
AMELIA RAHMA SARI
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