REPUBLIKA.CO.ID, JAKARTA -- Finance Minister Sri Mulyani confirmed that a 12 percent Value Added Tax (VAT) rate will be set. This is in accordance with the regulations on harmonization of taxation rules. Currently, the VAT rate is at 11 percent.

The application of the VAT rate is in accordance with the decision stipulated in Article 7 paragraph (1) letter b of Law No. 7 of 2021 on the Harmonization of Taxation Regulations (HPP Law). The rule states that the 12 percent VAT rate comes into force no later than January 1, 2025.

“There is already a law. We need to prepare so that it can be executed but it is with a good explanation,” Sri Mulyani said while attending the Joint Working Meeting of Commission XI of DPR RI, DPR RI Complex, Jakarta, Wednesday (13/11/2024).

He said that further explanation of this to the public is needed so that the government can maintain the health of the State Revenue and Expenditure Budget (APBN). He stressed the need to examine the correlation.

“But in other times the State Budget has to respond as we have seen episodes such as during the global financial crisis, the time of the pandemic (Covid-19), that we use the State Budget,” he said. Sri Mulyani said that there are indeed pros and cons that have emerged in society regarding the 12 percent VAT. Especially in relation to the need to consider the issue of the weakening purchasing power of society. However, according to him, the rules are still the rules.

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