Unofficial translation
As of April 1, 2022, the Government has adjusted the rate of Value Added Tax (VAT) from 10% to 11%. This is in line with the mandate of Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (UU HPP) Article 7 .
Despite the increase, it turns out that not all goods and services are subject to VAT. The government provides a list of certain goods and services that are either VAT-free or VAT-free.
Certain goods and services that are still provided with VAT-free facilities include basic necessities, health services, educational services, social services, insurance services, financial services, public transportation services, labor services, vaccines, textbooks and holy books, clean water including connection/installation costs and fixed load costs, electricity, simple flats, flats, hospitals, RSS, construction services for houses of worship and construction services for national disasters, machinery, marine fishery products, livestock, seeds/seeds, animal feed, fish feed, feed ingredients, raw hides and skins, raw materials for silver handicrafts, petroleum, natural gas, geothermal, gold bars and gold granules, weapons/defense equipment, and aerial photography equipment.
Meanwhile, certain goods and certain services that are still not subject to VAT include goods that are objects of regional taxes, services that are objects of regional taxes, money, gold bullion for the benefit of state foreign exchange reserves, securities, religious services, and services provided by the government.
The policy is an integral part of tax reform and fiscal consolidation as the foundation of a more equitable, optimal and sustainable tax system, said Head of the Communications and Information Services Bureau, Ministry of Finance, Rahayu Puspasari, in a statement, Friday, April 1, 2022.
The increase in VAT is intended to strengthen Indonesia’s economy in the long term and help finance the APBN, especially in the National Economic Recovery (PEN) program including the provision of various incentives in tackling the impact of COVID-19. The government will continue to formulate balanced policies to support economic recovery, assist vulnerable and underprivileged groups, and support the business world.
Source Rctiplus.com
