Minister Airlangga: VAT to Increase to 12 Pct. Starting 2025

Author: Dian Kencana
March 10, 2024

Food at a Thailand restaurant. Photo: seatoday.com/Dian Kencana Dewi

SEAToday.com, Jakarta-Coordinating Minister for Economic Affairs Airlangga Hartarto said the Value Added Tax (VAT) rate will increase to 12 percent in 2025 on Friday (3/8).

The VAT increase is part of the government's tax adjustment plan stipulated in the law on Harmonization of Tax Regulations issued in 2021. The law states that the previous VAT rate of 10 percent will increase to 11 percent and take effect on April 1, 2022, and will increase again to 12 percent by January 1, 2025. In addition, it also states that the VAT rate can be changed to a minimum of 5 percent and a maximum of 15 percent, but the adjustment depends on the next government.

Minister Airlangga said that this increase will be further discussed and implemented by the next government. According to him, since the public has chosen the continuous option, the programs that have been planned by the government will be continued. He also explained that the VAT increase will be further discussed in the drafting of the 2025 state budget next month. (DANTI/DKD)