Skip to content
View in the app

A better way to browse. Learn more.

Thailand News and Discussion Forum | ASEANNOW

A full-screen app on your home screen with push notifications, badges and more.

To install this app on iOS and iPadOS
  1. Tap the Share icon in Safari
  2. Scroll the menu and tap Add to Home Screen.
  3. Tap Add in the top-right corner.
To install this app on Android
  1. Tap the 3-dot menu (⋮) in the top-right corner of the browser.
  2. Tap Add to Home screen or Install app.
  3. Confirm by tapping Install.

Indonesia's government has approved a substantial tax reform package, with the value added tax (VAT) set to rise next year

Featured Replies

164425744_vatmain.jpg.6440b205e8b20661ff2504fbf9eae99f.jpg

 

On Thursday, Indonesia's parliament passed a law implementing one of the country's most comprehensive tax reforms, including an increase in VAT next year, a new carbon charge, and the cancellation of a scheduled corporate tax cut.


The measure is geared at increasing revenue collection and enhancing tax compliance after the COVID-19 pandemic affected state coffers hard this year and in 2020.


The new fiscal measures, according to Finance Minister Sri Mulyani Indrawati, will increase tax income by roughly 139.3 trillion rupiah ($9.80 billion) next year, bringing the tax ratio of Southeast Asia's largest economy to 9.22 percent of GDP, up from 8.44 percent without the new law.

 

However, some business groups and analysts have questioned the timing of the tax increases, citing the shaky economic recovery following the pandemic.


According to the law, the value-added tax (VAT) rate on practically all goods and services would be hiked from 10% to 11% in April of next year, and to 12% by 2025.


In addition, it eliminates a planned corporate tax cut and replaces it with a higher income tax rate for the wealthiest, a new carbon tax, and a new tax amnesty scheme.

 

The measure was adopted by all political parties in parliament except one.

 

"Through this law, we hope to maximise government revenue, create a more equitable tax system... and grow our tax base in this period of globalisation, when digital technology is so prevalent," Sri Mulyani stated.

 

According to the minister, the new tax measures will contribute less than 0.5 percentage point to headline inflation and have no impact on economic development.


From its original proposals, the government has made several concessions.
It had originally recommended a one-time increase in VAT to 12 percent and a minimum levy for loss-making businesses accused of tax evasion.

Create an account or sign in to comment

Recently Browsing 0

  • No registered users viewing this page.

Account

Navigation

Search

Search

Configure browser push notifications

Chrome (Android)
  1. Tap the lock icon next to the address bar.
  2. Tap Permissions → Notifications.
  3. Adjust your preference.
Chrome (Desktop)
  1. Click the padlock icon in the address bar.
  2. Select Site settings.
  3. Find Notifications and adjust your preference.