Inp.polri.go.id - Jakarta. President Prabowo Subianto emphasized that the implementation of the 12% Value Added Tax (VAT), effective from 2025, will strictly adhere to existing laws while being selectively applied.

Speaking at the Presidential Palace in Jakarta on Friday (6/12/2024), he said that the higher VAT rate will target luxury goods only, with measures in place to protect the general public.

"VAT is mandated by law, so we will implement it. However, it will be selective, applying only to luxury goods," the president said, as quoted by antaranews.com.

President Prabowo highlighted that since late 2023, the government has refrained from fully enforcing VAT on taxable goods to support lower-income groups.

“For ordinary citizens, we remain protective. The increase will only affect luxury goods," he added.

The policy stems from the 2021 Harmonized Tax Law. Deputy Speaker of House of Representatives (DPR) Sufmi Dasco Ahmad earlier suggested lower VAT rates for essentials like food, health, and education.

Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed that essentials and public services will remain at the current 11% VAT rate. A comprehensive economic package on VAT is expected within a week.

(mg/inp/pr/nm)