Southeast Asia Information Port (www.dnyxxg.com) – Indonesian Finance Minister Sri Mulyani Indrawati announced on November 14th that the country's Value Added Tax (VAT) rate will increase in January 2025.
Sri Mulyani made this announcement against the backdrop of widespread belief that the policy would harm consumers and the need for further government clarification.
Based on a law passed in 2021, the VAT is expected to rise to 12%. Some legislators, management groups, and economists believe that the implementation of the VAT increase should be postponed, as it may reduce residents' purchasing power.
At each stage, economic policies are adjusted to suit the actual situation. During the global economic crisis and the COVID-19 pandemic, various fiscal policies were implemented to ensure people's purchasing power and support the economy. However, at the current stage, the global macroeconomic situation has changed, therefore, adopting new economic measures will create the intrinsic strength of the national economy.
Sri Mulyani stated that Indonesia's tax revenue target for 2025 is 249 trillion rupiah (approximately US$156 billion), a 12.3% increase over the 2024 target.
Lawyer Muhammad Kholid called on the government to reconsider its value-added tax (VAT) policy, arguing that it could harm the economy.
Since the outbreak of the COVID-19 pandemic, Indonesia's economic growth has remained around 5%. In the third quarter of 2024, Indonesia's GDP grew by 4.95% year-on-year. (End)
