Jakarta – The government has officially announced a 1% increase in Value Added Tax (VAT) rates starting in 2025. This policy is based on the principles of justice and mutual cooperation, and takes into account the aspirations of the community. With this step, the government confirms its commitment to creating a fair taxation system while supporting national economic recovery.
Chairman of the Indonesian Tax Consultant Association (IKPI), Vaudy Starworld, emphasized that the policy is a very important strategic step in building a fairer and more transparent tax system. According to him, this policy not only reflects the government’s commitment to creating tax justice, but also becomes a strong foundation for increasing taxpayer trust in the national tax system.
“The 1% VAT increase policy is a strategic step to strengthen a fair taxation system and support national independence,” he said.
He added that a transparent approach and intensive communication are the keys to the success of this policy. Thus, the 1% PNN policy not only strengthens the national economy, but also ensures sustainable and equitable growth, which has a positive impact on people’s welfare.
“Through a transparent approach and intensive communication, this policy is expected to create a fairer business climate, increase state revenues, and encourage inclusive and sustainable economic development,” Vaudy added.
Meanwhile, Executive Director of Pratama-Kreston Tax Research Institute, Prianto Budi Saptono, stated that this policy has a very important strategic dimension in facing global challenges.
The main objective of this tax policy is to attract foreign investment that can strengthen the domestic economy, as well as replace the declining trend of corporate income tax (PPh Badan) revenues which has long been an obstacle in achieving state revenue targets.
“The tax policy aims to attract foreign investment and to replace the declining trend in corporate income tax revenues,” said Prianto.
Previously, Coordinating Minister for the Economy Airlangga Hartarto revealed that the 1% VAT rate increase would not be imposed on goods and services that fall into the basic needs category. This policy was taken to protect people’s purchasing power, especially for more vulnerable economic groups.
“The 1% VAT rate increase does not apply to goods and services that are basic necessities such as rice, meat, fish, eggs, vegetables, milk, sugar, education services, health services, public transportation services, labor, financial services, insurance services, polio vaccines, simple houses, and drinking water,” explained Airlangga.
Thus, even though there is an adjustment to the VAT rate, sectors that touch people’s daily lives still receive special treatment so as not to burden their economic conditions directly.
Meanwhile, this policy has received broad support from the majority of factions in the DPR in the level I discussion meeting of Commission XI. All factions, except PKS, agreed that the implementation of a gradual 1% VAT increase until 2025 is a fair strategic step. In addition, the factions support the protection of lower-middle income groups through tax exemptions on basic necessities and essential services.
