Tax Revenue From The Increase In VAT To 12% Is Expected To Reach Rp 3.5 Trillion

The Ministry of Finance estimates that additional tax revenue from the increase of the Value Added Tax (VAT) to 12% on luxury goods will reach between Rp 1.5 trillion and Rp 3.5 trillion. The Director General of Taxes, Suryo Utomo, mentioned that calculations with the Fiscal Policy Agency (BKF) have been made to assess the potential extra revenue from the 12% VAT policy. "Our calculations with Mr. Febrio (Head of BKF) show a range of about Rp 1.5 trillion to Rp 3.5 trillion," Suryo said at a press conference on Monday (January 6, 2024). Finance Minister Sri Mulyani Indrawati previously explained that the 12% VAT increase only applies to items that were already subject to the Luxury Goods Sales Tax (PPnBM) under Minister of Finance Regulation (PMK) Number 15 of 2023. Therefore, goods and services that have been charged the 11% VAT will not be affected by this increase.

According to PMK 15/2023, the items subject to the PPnBM include: -Luxury housing, such as apartments, condominiums, and townhouses priced at Rp 30 billion or more. -Hot air balloons, unmanned aircraft, and firearm ammunition, except for state purposes. -Aircraft subject to a 40% PPnBM, except those used for state purposes or commercial transport. -Firearms and other weapons, except for state purposes, such as artillery and revolvers. -Luxury yachts, ferries, and watercraft designed for passenger transport, except for state interests or public transport.

Tag: Fiscal Policy Agency Suryo Utomo Value Added Tax