Memahami Kenaikan Tarif PPN 12%

Summary

Indonesia is set to increase its Value Added Tax (VAT) to 12% starting January 1, 2025, raising public concerns. The VAT system has evolved since 1950, with significant changes in 1983 and 2022. The recent hike aims to support food security and programs like free nutritious meals. The new VAT will affect premium goods like electronics, automotive, and streaming services, while essentials like cooking oil and sugar remain exempt. The increase follows a period of economic challenges, including crises and the COVID-19 pandemic, making this change a significant milestone in Indonesia’s tax history.

Takeaways

• 😀 The new 12% Value Added Tax (VAT) will be implemented starting January 1, 2025, sparking negative public sentiment.
• 😀 Indonesia has had a long history of VAT implementation, starting in 1950, with significant changes over the years.
• 😀 The VAT rate was standardized at 10% in 1983 and remained at that level for 39 years, despite economic and political turmoil in Indonesia.
• 😀 In 2022, the VAT rate was increased to 11%, but it only lasted for about 1 year and 8 months before the next increase.
• 😀 The new VAT increase to 12% is expected to impact several sectors, including premium goods, electronics, automotive, and streaming services.
• 😀 Economic Minister Airlangga Hartarto justified the VAT increase as necessary for food security and funding free nutritious meals programs.
• 😀 A list of goods and services that will be subject to the new 12% VAT includes premium clothing, electronics, cars, concert tickets, ready-to-eat meals, and streaming services.
• 😀 Despite the claim that the VAT increase will not have an immediate impact, products like electronics, automotive goods, and streaming services are expected to be widely affected, particularly in urban areas.
• 😀 Certain products such as government-branded bulk cooking oil, wheat flour, and sugar will remain exempt from the new VAT increase.
• 😀 The VAT increase is part of a broader economic policy that has been evolving over the decades, often adjusting in response to national crises and political shifts.

Q & A

What is the upcoming change in Indonesia's Value Added Tax (PPN) starting January 1, 2025?

The Value Added Tax (PPN) in Indonesia will increase from 11% to 12%, effective January 1, 2025.

What is the historical context of PPN in Indonesia?

PPN was first implemented in Indonesia in 1950, but it became standardized at 10% in 1983, where it remained for nearly 40 years until being raised to 11% in 2022.

Why did the Indonesian government decide to increase the PPN to 12%?

The government cited reasons such as strengthening food security and supporting programs like free nutritious meals as key motivations for the increase.

What types of goods and services will be impacted by the PPN increase to 12%?

Goods and services that will be impacted include premium goods like electronics and automobiles, as well as services such as concert tickets, fast food, and streaming services.

Will basic goods be affected by the PPN increase?

No, essential goods such as government-subsidized cooking oil, wheat flour, and sugar will remain exempt from the PPN increase.

How long did the 10% PPN rate last in Indonesia?

The 10% PPN rate was in place for approximately 39 years, from 1983 until it was raised to 11% in April 2022.

How long did the 11% PPN rate last before the increase to 12%?

The 11% PPN rate lasted for only about 1 year and 8 months, from April 2022 to January 2025.

What sectors of society are most likely to be affected by the PPN increase?

Urban middle-class consumers will likely be most affected by the PPN increase, as they commonly consume premium goods and services such as electronics, automobiles, and streaming services.

What are the broader economic reasons for raising the PPN?

The increase in PPN is part of a broader fiscal strategy to enhance economic resilience, particularly in the context of food security and public welfare programs like free nutritious meals.

How does the increase in PPN relate to previous economic events in Indonesia?

The PPN rate has seen several changes over the years, particularly during times of economic instability, such as the 1998 economic crisis and the COVID-19 pandemic in 2020. The most recent increase from 10% to 12% follows a period of relatively short stability.