Tarif PPN RI Terbesar Kedua di ASEAN, Ini Efek Kengeriannya

Summary

Indonesia's Value Added Tax (VAT) is set to rise from 11% to 12% in 2025, positioning the country with the second-highest VAT rate in ASEAN. This increase, part of broader tax reforms, is raising concerns across several sectors. The food and beverage industry fears higher production costs and price hikes, while retail and manufacturing industries worry about reduced consumer spending and supply chain disruptions. With Indonesia's economy already showing signs of slowing growth, experts urge the government to reconsider the hike to avoid further strain on purchasing power and overall economic stability.

Takeaways

• 😀 The Value Added Tax (PPN) in Indonesia will increase from 11% to 12% in January 2025, making it the highest rate in ASEAN.
• 😀 Indonesia's PPN will match the rate in the Philippines, with other ASEAN countries like Vietnam (10%) and Malaysia (8%) having lower rates.
• 😀 Certain goods and services, such as food items, essential commodities, religious services, social services, and education, will remain exempt from the 12% PPN.
• 😀 The food and beverage industry fears that the PPN increase will lead to a 2-3% price hike for consumers, affecting their purchasing power.
• 😀 Retailers are concerned that the higher PPN will reduce consumer spending, especially among middle and lower-income groups.
• 😀 The Indonesian economy is showing signs of slowing growth, with a GDP growth of just 4.95% in Q3 2024, lower than the previous quarters.
• 😀 There is a widespread fear that the PPN increase will further hurt consumer purchasing power, which is already weak due to economic challenges.
• 😀 The automotive sector predicts that the PPN hike could lead to a 3-5% increase in production costs due to supply chain impacts.
• 😀 The government is expected to implement the PPN hike in stages, starting from 10% in 2022 to 11%, and finally reaching 12% in 2025.
• 😀 Despite the government's push for the PPN increase, industry leaders urge a review of the decision to prevent further economic strain on businesses and consumers.

Q & A

What is the reason for the VAT increase in Indonesia in 2025?

The Indonesian government plans to raise the Value Added Tax (VAT) to 12% in 2025 as part of the Harmonization of Tax Regulations (HPP) Law to increase public revenue and improve the country's fiscal health.

How does Indonesia's VAT rate compare to other countries in ASEAN?

As of 2024, Indonesia's VAT is 11%, which is among the highest in ASEAN, second only to the Philippines, which has a 12% VAT. Other countries in the region, such as Vietnam and Cambodia, have a VAT of 10%, while Singapore has a lower rate of 9%.

When was Indonesia's VAT rate last increased, and by how much?

Indonesia's VAT rate was increased from 10% to 11% on April 1, 2022, and is scheduled to rise to 12% in 2025.

Which sectors are expected to be most affected by the VAT hike?

Industries that are heavily reliant on consumer spending, such as food and beverage, retail, and manufacturing, are expected to be most affected. The food and beverage sector, in particular, is concerned about price increases leading to reduced consumer demand.

What concerns have been raised by business associations regarding the VAT hike?

Business associations, particularly in the food and beverage sector, have expressed concerns that the VAT increase will lead to price hikes, reducing consumer demand and putting additional financial strain on businesses. Retailers and manufacturers, such as in the automotive industry, also worry about cash flow and rising production costs.

How might the VAT increase affect consumer prices in the food and beverage industry?

The VAT increase could lead to a 2-3% rise in prices for food and beverage products, which may reduce consumer purchasing power, especially among the lower-middle class.

What are the potential consequences of the VAT hike on the Indonesian economy?

The VAT hike may exacerbate the already sluggish economic growth, with some sectors predicting that it will weaken consumer spending, particularly in lower-income groups. This could potentially hinder the government's goal of achieving 8% economic growth.

What was the growth rate of Indonesia's economy in the third quarter of 2024?

Indonesia's economy grew by 4.95% in the third quarter of 2024, which is lower than the growth rates of the previous two quarters, signaling a slowdown in economic activity.

What has been the impact on the purchasing power of Indonesian consumers?

Purchasing power among Indonesian consumers has been weakening, especially in the lower and middle-income groups, which could further diminish with the VAT increase. This reduced spending power is a concern for businesses and the overall economy.

How does the VAT increase affect businesses with large supply chains, such as the automotive industry?

In industries with large supply chains, such as the automotive sector, the VAT increase could lead to a 3-5% rise in production costs due to higher costs at each stage of the supply chain. This could force businesses to reconsider pricing strategies, which may affect competitiveness in the market.