Headline: Indonesia Increases PPN to 12% for Luxury Goods: Here’s What You Need to Know
Subhead: President Prabowo Subianto clarifies that daily essentials remain exempt from the tax hike
Byline: CNBC Indonesia
Body:
President Joko "Jokowi" Widodo, on December 31, 2024, clarified that the Value Added Tax (PPN) increase from 11% to 12% will only affect luxury goods, effective January 1, 2025. Daily necessities such as rice, meat, soap, detergent, mobilepulsa, and streaming services will remain exempt.
The new 12% PPN rate applies to the following luxury goods categories, as defined by Minister of Finance Regulation PMK-15/2023:
- Luxury Housing: Houses, apartments, townhouses, and similar properties priced at IDR 30 billion (USD 2 million) or above.
- Aircraft and Vessels: Balloons, airplanes, yachts, and other luxury vehicles excluding those used for public transport or tourism purposes.
- Firearms and Ammunitions: Pellets, bullets, and firearms not intended for state use.
- Others: Artifacts, collectibles, and high-end electronic devices.
The PPN on Luxury Goods (PPnBM) rate varies from 20% to 75%. The current 20% PPnBM rate applies to luxury housing priced at IDR 30 billion or above.
Hypothetical Calculation:
For a luxury house priced at IDR 30 billion:
With the 11% PPN and 20% PPnBM (current rates):
- PPN: IDR 3,300,000,000 (11% of IDR 30,000,000,000)
- PPnBM: IDR 6,000,000,000 (20% of IDR 30,000,000,000)
- Total price: IDR 39,300,000,000
With the 12% PPN and 20% PPnBM (new rates):
- PPN: IDR 3,600,000,000 (12% of IDR 30,000,000,000)
- PPnBM: IDR 6,000,000,000 (20% of IDR 30,000,000,000)
- Total price: IDR 39,600,000,000
The price increase due to the PPN hike in this example is approximately IDR 300 million (USD 20,500), translating to a 0.76% increase.
For more insights, watch this video: Dilema Pengusaha Restoran Soal PPN 12%
Next Article: Video: PPN 12% in January 2025, Why the Urgency?
