- Indonesian businesses and unions are calling for a delay in the scheduled VAT increase due to economic concerns.
- The VAT is set to rise from 11% to 12% on January 1, 2025, as part of a tax overhaul passed in 2021.
- Opponents argue that the increase could worsen social inequality and negatively impact the economy, which is currently experiencing stagnant growth around 5%.
- Labour groups threaten protests if the VAT hike proceeds, citing potential harm to workers and increased layoffs.
- A state bank predicts the VAT increase will have a minimal impact on GDP growth, estimating a reduction of only 0.05 percentage points.
- The government is considering targeted relief measures, such as assistance for low-income households and a temporary 10% cut in domestic airfares to support tourism.
- The VAT applies to most products and services, with exemptions for staple foods and certain education and health-related items.
Source: reuters.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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