VAT Rate Increases to 11% Starting April 1, 2022

Jakarta, CNN Indonesia – The government raised the tax value added (VAT) rate from the current 10 percent to 11 percent. The new rates are effective from April 1, 2022.

This new tariff is contained in the draft Law on the Harmonization of Tax Regulations (RUU HPP) which was received by Currently, the draft has been approved by the government and the DPR.

“The Value Added Tax rate is 11 percent which will come into effect on April 1, 2022,” wrote Article 7 paragraph 1 of the HPP Bill, as quoted on Friday (30/9).

Furthermore, the government plans to raise the VAT rate again to 12 percent. The plan is that this tariff will take effect from January 1, 2025.

However, the government is still open to the option that the VAT rate of 11 percent in 2022 and 12 percent in 2025 can be changed to a tariff range scheme. The range is the lowest 5 percent and the highest 15 percent.

“The rate of value added tax as referred to in paragraph (1) can be changed to a minimum of 5 percent and a maximum of 15 percent,” said Article 7 paragraph 3.

However, changes to the VAT rate with this tariff range scheme will be further regulated through a government regulation (PP) after being submitted by the government to the DPR to be discussed in the preparation of the Draft State Revenue and Expenditure Budget (RAPBN).

Meanwhile, VAT with zero percent rate is still given. However, only on exports of tangible taxable goods, exports of intangible taxable goods, and exports of taxable services.

Previously, the government and Commission XI of the DPR had approved the HPP Bill to be brought from the first level discussion at the finance commission to move up to the second level discussion at the DPR plenary meeting.