Jakarta – Coordinating Minister for Economic Affairs assured the public that the 1 percent VAT increase is only for luxury goods. Coordinating Minister for Economic Affairs Airlangga Hartarto said that only certain goods are affected by the VAT increase, because this VAT adjustment is only for luxury goods.
Airlangga further stated that
the increase in the VAT rate to 12 percent 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.
“The 12 percent increase in VAT rates does not apply to basic needs that concern the general public,” he said.
Meanwhile, Finance Minister Sri Mulyani Indrawati on a different occasion said that the 1% VAT rate adjustment only targets premium goods and services, such as premium rice, premium fruits, premium meat (wagyu, kobe beef), expensive fish (premium salmon, premium tuna), premium shrimp and crustaceans (such as king crab).
“For example, food consumed by the richest group, namely decile 9-10, we will impose VAT. For example, premium beef, wagyu-kobe, which can cost more than IDR 2-3 million per kilogram. Meanwhile, meat enjoyed by the general public is around IDR 150,000-IDR 200,000 per kilogram, it is not subject to VAT,” he said.
“Premium education services, in this case the payment of school fees can reach hundreds of millions, premium health services and for electricity customers of 3500-6600 VA are subject to VAT (12 percent),” he said.