REPUBLIKA.CO.ID, JAKARTA — Finance Minister Sri Mulyani explained the sectors affected by the 12 percent value added tax (VAT) policy, which began to be enforced as of January 1, 2025. He revealed a 12 per cent VAT is only imposed on luxury goods, which are included in the PPNBM (Sales Tax on Luxury Goods).

“The VAT that rises to 12 percent applies only to luxury goods and services that have been subject to PPNBM so far, the category is very small or limited,” Sri Mulyani told reporters at the Ministry of Finance Office, Jakarta, Tuesday (12/31/2024).

Sri Mulyani mentions several examples of such luxury items. Namely starting from jets, yachts, yachts, and very luxurious homes. The value is regulated in the Regulation of the Minister of Finance (PMK) Number 15 of 2023 regarding PPNBM.

“This means that for other goods and services that have so far been hit by 11 per cent there is no increase in VAT to 12 per cent, so still,” he stressed.

RI President Prabowo Subianto expressed certainty that the value added tax (VAT) policy of 12 percent will be implemented as of January 1, 2025. He ensured a 12 per cent VAT policy was only enforced for luxury goods.

“Today the government decided to increase the VAT rate of 11 percent so that 12 percent will only be imposed on luxury goods and services,” Prabowo told a news conference at the Finance Ministry office in Jakarta on Tuesday (12/31/2024).

“I repeat to be clear, the increase in VAT from 11 per cent to 12 per cent is only imposed on luxury goods and services. That is, certain goods and services that have been subject to VAT on luxury goods, which are consumed by groups of people, people can afford,” he stressed.

Prabowo said that the policy remains in force because it is the mandate of Law No. 7 of 2021 on the Harmonization of Taxation Regulations (HPP). However, he again emphasized the imposition of only luxury goods used by the upper echelons.

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