Jakarta – Minister of Finance Sri Mulyani Indrawati reaffirmed President Prabowo Subianto’s policy on Value-Added Tax (VAT), emphasizing that goods and services currently exempt from VAT will remain free of charge as the policy takes effect on January 1, 2025.

“VAT WILL NOT INCREASE…!” Sri Mulyani declared on her Instagram account, @smindrawati, on Tuesday (January 31).

“President @prabowo attended the APBN 2024 Closing Meeting and the Core Tax Launch at the Ministry of Finance,” she added.

In her post, Sri Mulyani explained that Prabowo announced the VAT policy in alignment with the mandates of the Harmonization of Tax Regulations Law (Law No. 7/2021). Under the policy, goods and services that have been VAT-exempt will continue to enjoy a 0% VAT rate as stipulated in Government Regulation No. 49/2022.

“All goods and services currently subject to 11% VAT WILL NOT EXPERIENCE ANY CHANGES in the amount paid (meaning NO VAT INCREASE and VAT will remain at 11%),” Sri Mulyani clarified.

She further explained that the 12% VAT rate, which will take effect on January 1, 2025, will apply solely to luxury items, such as yachts and private jets.

“Luxury goods subject to the 12% VAT are those currently taxed under the Luxury Goods Sales Tax (PPnBM), as regulated by Ministerial Regulations PMK 15/2023 and PMK 42/2022,” Sri Mulyani elaborated.

“This includes private jets, yachts, luxury homes or apartments priced above IDR 30 billion, and high-end motor vehicles,” she added.

Government Stimulus Packages to Continue

Sri Mulyani also confirmed that the stimulus packages for the public and tax incentives announced by the Coordinating Minister for Economic Affairs on December 16, 2024, will remain in effect.

She detailed the stimulus package, which includes:

• 10 kg of rice per month distributed from January to February 2025 for 16 million Food Assistance Program (PBP) recipients.
• 50% electricity discounts for customers with a maximum capacity of 2200 VA or lower during January and February 2025.
• 0.5% final income tax exemption for SMEs with an annual turnover under IDR 500 million.
• Income Tax (Article 21) borne by the government for workers earning up to IDR 10 million per month.

Additionally, subsidies for labor-intensive industries were highlighted, including:

• 5% interest subsidies for machinery revitalization.
• 50% work accident insurance coverage for labor-intensive sectors for six months.
• Improved access to Job Loss Insurance (JKP).

Sri Mulyani emphasized the importance of taxes and the state budget (APBN) as instruments for fostering justice and solidarity, protecting society and the economy, and prioritizing the people’s welfare.

In her post, she also wished the nation a Happy New Year 2025 and encouraged all elements of society to remain committed to building the nation.

“Let’s keep striving for a prosperous, fair, and advanced Indonesia,” Sri Mulyani concluded, accompanied by three fire emojis and three Indonesian flag emojis. (RR)