REPUBLIKA.CO.ID, JAKARTA -- RI President Prabowo Subianto stressed that goods and services, including basic necessities of society that have been granted VAT-free facilities, remain valid at zero percent VAT rate. It was conveyed by the President regarding the implementation of the increase in VAT rates from 11 percent to 12 percent, which officially takes effect from January 1, 2025.

“For goods and services that are basic necessities of society that have been granted exemption facilities or charged zero percent VAT rates still apply,” Prabowo Subianto said during a press conference at the Ministry of Finance in Jakarta on Tuesday (31/12/2024).

The President confirmed that goods and services needed by the general public, such as basic necessities, namely rice, meat, fish, eggs, vegetables, fresh milk, drinking water, educational services, health services, public transport services and simple houses, are provided with VAT exemption facilities.

Meanwhile, a 12 percent increase in the VAT rate was imposed on luxury goods and services, that is, certain goods and services that have been subject to VAT on luxury goods. Those luxuries, the President said, include private jet planes, yachts, yachts, to luxury homes used by upscale communities.

According to the Head of State, this policy was an attempt by the government to create a taxation system that sided with the people. “I think it is very clear that the government will continue to work to create a fair and proracyat taxation system,” Prabowo said.

On a previous occasion, Finance Minister Sri Mulyani Indrawati explained that the government has also prepared a number of incentives in the form of an Economic Stimulus Package following the establishment of a Value Added Tax (VAT) of 12 percent in 2025.

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