Indonesia further scales back VAT hike on luxury goods and services

President Prabowo Subianto reverses decision to include wider selection of items

Indonesian President Prabowo Subianto announced on Tuesday that a planned hike in value-added tax would apply only to a narrow range of luxury goods and services. © Reuters

January 1, 2025 14:18 JST

JAKARTA (Reuters) - Indonesia's President Prabowo Subianto on Tuesday said a planned increase in the value-added tax (VAT) rate by one percentage point to 12% effective Wednesday, Jan. 1, will apply only to luxury goods and services.

Prabowo said the decision should end speculation over which items and services would be affected by the VAT increase.