Tax & Spend
Indonesia Waters Down Planned VAT Hike In Last-Minute Move
- Government will raise tax only on luxury homes, private jets
- VAT was set to rise to 12% for most goods, services on Jan. 1
Protestors demonstrate against the VAT increase in Jakarta, on Dec. 26.
Photographer: Juni Kriswanto/AFP/Getty ImagesThis article is for subscribers only.
Indonesia scaled back its planned increase in the value-added tax rate just hours before it was set to take effect on January 1 amid escalating public outcry.
The VAT rate will be increased to 12% only for goods and services that are already subject to existing luxury tax, such as private jets, yachts and pricier houses, President Prabowo Subianto said in a speech on Tuesday after unexpectedly attending the yearend meeting of the finance ministry.