Indonesia Proposes VAT Increase on Luxury Goods to Shield Low-Income Earners

• A woman was seen walking past a Dior logo in a Jakarta shopping mall
• Indonesia’s parliament proposed raising VAT only on luxury items to protect low-income individuals
• VAT is scheduled to increase from 11% to 12% on January 1, 2025
• Public demand for delaying the VAT increase is growing due to concerns over reduced purchasing power
• Luxury items will be taxed at the new 12% VAT rate, affecting mainly the upper middle class
• The discussion on this proposal involved senior lawmakers and President Prabowo Subianto
• Items targeted for the VAT increase are already subject to a luxury sales tax on houses, cars, airplanes, and yachts
• The luxury tax ranges from 10% to 200% and will continue alongside the VAT
• The government is reviewing the VAT proposal and plans a quick response
• The VAT increase aims to enhance the structural integrity of the national budget
• The government will also announce a fiscal stimulus to support labor-intensive industries and help the poor with electricity bills

Source: msn.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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