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Dining Out Tax-Free: Here’s How to Enjoy 12% PPN Relief at Restaurants

by Chief Editor
written by Chief Editor

Title: Dining Out in Jakarta: What You Need to Know About Restaurant Taxes

In the vibrant city of Jakarta, dining out has become a staple for locals and visitors alike. But as you indulge in the culinary delights the city has to offer, understanding the tax landscape can help you make informed decisions. Here’s a simple guide to restaurant taxes in Jakarta.

PPN Increase Near Istana"</strong></p>”>Pajak Pertambahan Nilai (PPN) 101

pensait that meals at restaurants are subject to PPN, a value-added tax, with a rate of 12%. However, the Directorate General of Taxes (DJP) under the Ministry of Finance (Kemenkeu) has clarified this misconception.

In a recent statement on their official Instagram account, @ditjenpajakri, DJP explained that food consumption at restaurants is not subject to PPN. Instead, restaurant taxes are managed at the local level by regional governments.

Yet, how are these taxes applied?

Understanding Restaurant Taxes in Jakarta

Food and beverages served in hotels, restaurants,-warungs, catering services, and similar establishments are subject to regional taxes, as per Undang-Undang Nomor 7 Year 2021 regarding the Harmonization of Taxation Regulations (HPP).

This tax, often referred to as the Pajak Barang dan Jasa Tertentu (PBJT), is not administered by the central government but rather by local authorities. The tax applies to food and drinks consumed on-site or taken away, including those supplied by catering services.

The Rate of Restaurant Tax

The rate for this specific PBJT is capped at 10%, according to Undang-Undang Nomor 1 Year 2022 on the Financial Relations between the Central and Regional Governments (HKPD).

The tax base, or the amount on which the tax is calculated, is the price consumers pay for these goods and services. If there’s no payment, the tax base is determined by the average price of similar goods and services in the region.

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Tax Chief’s Resistance to Prabowo’s Audit: Should He Resign?

by Chief Editor
written by Chief Editor

Headline: Clarity on Indonesia‘s PPN 12%: Lawmaker Challenges Director General of Taxation‘s Interpretation

In a surprising turn of events, the planned implementation of Indonesia’s 12% Value Added Tax (PPN) by the end of 2024 has sparked confusion and concern, with a top lawmaker accusing the Director General of Taxation of misinterpreting presidential directives.

President Prabowo Subianto had clearly stated that the PPN increase from 11% to 12% would only apply to luxury goods and services. However, Mukhamad Misbakhun, the chairman of the House of Representatives’ Committee XI, has found that the implementation by the Director General of Taxation is ambiguous and chaotic, with the ministerial regulation (PMK) No. 131/2024 causing confusion among businesses.

Misbakhun criticized the PMK for using a different basis for calculation, stating, "It’s as if the UU HPP cannot apply the PPN with multiple tariffs." He argued that the law does not prohibit a multitariff system, allowing for both 11% and 12% rates to coexist, with the latter only applied to luxury goods and services.

The Director General of Taxation, however, maintains that the PMK correctly implements the presidential instruction. In a separate statement, the Ministry of Finance declared that standard-rated items will be taxed at 12%, calculated with a factor of 11/12 of the selling price, replacement cost, or import value.

Misbakhun expressed bewilderment at this approach, stating, "Does this mean the Director General of Taxation has lost its loyalty in interpreting the president’s clear instructions?"

The lawmaker also slammed the rushed decision-making process, stating that the short lead time before implementation left businesses struggling to adapt their systems. He added that many retail companies have already charged PPN at 12%, confusing customers who ended up paying more than they should have.

Misbakhun lamented the complexity of the regulation, urging the Directorate General of Taxation to issue simpler, clearer rules to prevent misinterpretations and erode public trust in the presidency.

This is a developing story. Check back for updates.

(Reported by rfs and dhn)

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Former Finance Minister Sri Mulyani Urges Reduced PPN Rate to 12%

by Chief Editor
written by Chief Editor

Title: GNB Urges Government to Reconsider PPN 12% Hike, Citing Marginalized Middle Class

Jakarta, CNN Indonesia — The Gerakan Nurani Bangsa (GNB) has called upon the government not to burden the middle and lower-middle classes with a hike in the Value Added Tax (PPN) to 12% starting in 2025. This appeal was made by GNB’s Lukman Hakim Saifuddin to Minister of Finance Sri Mulyani at a meeting held on Friday evening.

In the meeting, Lukman and the GNB criticized the government’s policy, which they believe further squeezes the purchasing power of the middle class, particularly those vulnerable to post-pandemic economic impacts. "The middle class is already heavily burdened. There are mass layoffs, income cuts, and rising costs of living. A plan to increase PPN to 12% will only worsen their condition," Lukman said in a virtual press conference on Saturday.

He argued that such a policy not only reduces consumer spending but also affects the consumption sector, which is a significant driver of the Indonesian economy. Besides the PPN increase, Lukman also highlighted other planned measures such as the hike in BPJS Kesehatan premiums and the Tapera program, which could potentially increase the burden on the public.

Lukman urged Sri Mulyani to reevaluate the fiscal policies implemented and encouraged the government to be more careful in its decision-making, especially those directly related to the purchasing power of the masses. "The government must formulate policies that are fair to the middle and lower-middle classes. This is not only about being fair but also about maintaining long-term economic stability," Lukman stated.

It isknown that the government under President Prabowo has confirmed plans to increase the PPN rate to 12% starting January 1, 2023. This move is part of the implementation of Law No. 7/2021 on the Harmonization of Income Tax Laws, which was enacted during the Jokowi administration.

Citing Sources: (tst/asa)

[Video]: [Gambar: Video CNN]

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Cash Usage Set to Surge Again

by Chief Editor
written by Chief Editor

Java-Based QRIS Payments to See 12% Value Added Tax Increase in 2025

The Indonesian government has officially announced a rise in Value Added Tax (VAT) on Java-based Quick Response Code Indonesian Standard (QRIS) payments, effective January 1, 2025. This shift will impact transactions conducted using the country’s popular QR code standard.

Until now, VAT has primarily targeted certain sectors. However, this new policy introduces a 12% VAT on QRIS-based transactions, a change that has sparked conversation and concern among economists.

Professor Dr. Rahmat Setiawan, SE, MM, from the Faculty of Economics and Business at Airlangga University (FEB Unair), believes the increased VAT on QRIS transactions could lead consumers to revert to cash payments. "If QRIS transactions are subject to a 12% VAT, customers may opt for cash again. Why choose QRIS if it ultimately attracts a higher VAT?" he explained.

Prof. Setiawan condemns the government’s decision to impose a 12% VAT on QRIS transactions, stating that it contradicts their efforts to promote non-cash transactions. "The government encourages non-cash transactions to boost economic growth and combat money laundering," he pointed out, referring to the government’s and Bank Indonesia‘s joint campaign to increase non-cash transactions.

Moreover, the economist predicts that this VAT increase could impact daily necessities and potentially contribute to unemployment. "Items like deodorant, toothpaste, and soap aren’t just luxuries; they’re daily essentials, and now they’re subject to a 12% VAT," he stated. He also expressed concern that a decrease in consumption due to the increased VAT could lead to job losses.

Prof. Setiawan urges the government to reconsider or postpone the VAT hike, suggesting they could use their existing authority to cap the VAT at 11% without amending the law. "The government can lower or raise the VAT to a maximum of 15% without changing the law," he concluded.

jar/tjh

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Prabowo Urges Reversal of PPN Hike to 12%, Here’s How to Make It Happen

by Chief Editor
written by Chief Editor

** området

Widespread protest and a petition signed by nearly 200,000 people have been sparked by plans to increase Value Added Tax (VAT) to 12% starting in 2025. The move, stipulated in Law No. 7 of 2021, or the Law on Tax Organization Harmonization (HPP), has drawn fierce opposition from citizens who argue that it will disproportionately impact lower-income individuals and stifle economic recovery.

The Indonesian government, however, has stood firm, stating that the VAT increase is crucial for balancing the state budget and that several stimulus packages are in place to maintain household purchasing power temporarily. Nevertheless, demands to revoke the VAT increase remain loud and clear.

legal expert weighs in

Mhd Zakiul Fikri, the director of Hukum at the Center of Economic and Law Studies (Celios), believes that the government should swiftly reconsider the VAT hike due to the overwhelming backlash. He presents several scenarios that could alleviate the situation:

  1. Adjusting the VAT rate: As stipulated in the HPP Law, the VAT rate can be adjusted between 5% and 15%, providing a range of possibilities for review and reduction.

However, Zakiul notes that the current legal framework may cause confusion, as the criteria for determining the 5% to 15% range are ambiguous. Moreover, any changes would require joint implementation with the House of Representatives (DPR), which could prove to be a lengthy and complex process, given the approaching deadline of January 2025.

CALL FOR AN EMERGENCY REGULATION

Given these challenges, Zakiul proposes that President Prabowo Subianto initiate an emergency regulation, or Peraturan Pemerintah Pengganti Undang-Undang (Perppu), to circumvent the impending VAT increase. He argues that Perppu has been employed in the past, including by President Joko Widodo (Jokowi) in 2017, to address urgent fiscal matters.

A RARE SHOW OF UNITY

Unusually, Zakiul’s recommendation aligns with that of Hadi Poernomo, a former director-general of taxation at the Ministry of Finance and former chairman of the Supreme Audit Agency (BPK). Hadi also urges the government to revoke the VAT increase, citing its potential impact on low-income households and small businesses. He suggests that the VAT rate could be reverted to 10% through another decree.

The backdrop to this debate is a looming budget crisis. According to the 2025 State Revenue and Expenditure Budget, the government’s reliance on VAT for revenue has surged to 43.2%, raising concerns about the potential consequences of lowering the VAT rate.

Alash, the inevitable?

As the clock ticks down towards January 2025, the debate over the VAT increase continues to intensify. With the DPR currently in recess until mid-January, the focus turns to the government and President Prabowo to address the potential economic fallout of this contentious fiscal policy.

(End/rrd)

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Improved Title: "Prabowo’s Alternative: Slash Tax in This Sector, Not Boost PPN"

by Chief Editor
written by Chief Editor

Headline: Indonesia‘s PPN Hike Sparks Opposition, Alternatives Proposed

Subhead: Government plans to increase Value Added Tax (PPN) to 12% in 2025, but critics argue there are more equitable revenue-raising strategies.

Indonesia’s government is considering a boost in Value Added Tax (PPN) from 11% to 12% starting 2025, as per the latest Harmonization of Tax Regulations Law (1/2021). The Ministry of Finance projects an additional Rp 75 trillion in state revenue. However, the proposed hike has sparked controversy, with concerns ranging from increased consumer prices to decreased purchasing power.

Proponents argue that the PPN increase could bolster state coffers, but critics contend that the government could explore more progressive tax strategies. According to a Center for Economic and Legal Studies (Celios) report, there are alternative revenue-raising measures that could be more equitable.

Celios suggests taxing the wealthy by targeting their substantial assets in Indonesia. This approach could potentially generate Rp 81.6 trillion in revenue for the country. Additionally, the government can consider imposing a carbon tax, an idea that has been on the table for years. If implemented effectively, this could bring in up to Rp 69 trillion.

The government can also tap into windfall profits from commodities like coal, which could potentially yield Rp 47 trillion. Progressively reforming corporate income tax and closing tax loopholes in the digital and palm oil sectors could also help maximize revenue.

"These measures are not only more equitable but also less likely to strain lower-income families," the Celios report argues.

Celios’s legal director, Mhd Zakiul Fikri, suggested that President Prabowo Subianto could reconsider the PPN hike and explore these alternatives. He pointed out that previous governments had used Presidential Regulations in Lieu of Laws (Perppu) to make regulatory changes.

Meanwhile, the move to increase PPN has generated widespread public debate, with concerns around burdening consumers and reducing purchasing power. The government maintains that it is committed to treasury expansion, but critics contend that alternative revenue-raising strategies are available and more forthcoming.

Keywords used for SEO: Indonesia, PPN, Value Added Tax, tax hike, tax revenue, tax alternatives, equitable taxation, Celios, Mhd Zakiul Fikri, presidential regulations

Internal linking opportunities: Previous articles on Indonesia’s tax policy, Celios and its reports, President Prabowo Subianto

External linking opportunities: Government official statements, Celios reports, relevant news outlets covering the topic

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Reveling the Positive Impacts of VAT Hike: What are They?

by Chief Editor
written by Chief Editor

Title: Indonesia‘s PPN Hike to 12% in 2025: The Projected Positive Impacts

Article:

Assistant Editor – December 26, 2024

Jakarta, Indonesia – The Indonesian Ministry of Finance (Kemenkeu) has outlined a series of positive impacts expected from the increase of Value Added Tax (PPN) from 11% to 12%, set to take effect on January 1, 2025. This tax hike aligns with the provisions of Law Number 7 of 2021, which harmonizes tax regulations and exempts essential daily goods and services from the increase.

Projected Positive Impacts

Analysts anticipate that the PPN hike will have a positive influence on four key sectors. These include:

  1. Job Creation: Following the PPN increase from 10% to 11% in 2022, the PPN 12% is projected to boost employment. Between 2015 and 2019, an average of 2.4 million jobs were created annually, representing a 2.0% increase. This figure jumped to 3.2% (or 4.2 million jobs) when PPN was increased to 11% in 2022. Post-2022, jobs growth averaged 3.4% (or 4.7 million jobs) per year.

  2. Formal Employment Growth: The PPN hike is also expected to drive formal employment growth. From 2015 to 2019, average annual growth was 3.8% (or 1.9 million jobs). In 2022, this figure increased to 3.6% (or 1.9 million jobs). Post-2022, the growth rate jumped to 6.4% (or 3.6 million jobs) per year.

  3. Personal Income Tax (PPh 21) Collection: The PPh 21 is projected to increase by 19.35% annually, following the PPN hike. From 2015 to 2019, the average annual increase was 7.2% (or IDR 8.5 trillion). In 2022, this increased to 16.3% (or IDR 24.5 trillion). Post-2022, the PPh 21 is expected to grow by 19.35% per year.

  4. Inflation Control: Despite the PPN increase, the ministry assures that inflation will be kept in check. Between 2015 and 2019, average annual inflation stood at 3.17%. Although it climbed to 5.51% in 2022 post-PPN hike, it is projected to decrease to 2.08% per year afterwards.

Mitigating Measures

Coordinating Minister for Economic Affairs Airlangga Hartarto has expressed optimism about maintaining purchasing power despite the PPN increase. He announced that the government will introduce various stimulus packages in 2025, including:

  • 50% discount on electricity tariffs from January to February
  • Property purchase tax exemption up to IDR 2 billion
  • Full government subsidy for electric motorcycles
  • 3% reduction in luxury goods sales tax (PPnBM) for electric cars
  • 0% PPN for the transportation sector
  • PPN exemption for essential commodities
  • A detailed list of luxury goods to be taxed at 12% PPN to be issued before January 1, 2025

Stay tuned for more updates on Indonesia’s economic developments.

(Source: Kementerian Keuangan Indonesia)

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**" Not Blaming Pak Prabowo: A Clarification"

by Chief Editor
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인은 및 inconscient, ex parte mark, or assignor estoppel could arise from such a situation. Here are some suggestions on how to protect your invention:

  1. Keep Detailed Records:
    Maintain thorough documentation of your invention’s development, including dates, iterations, and any related correspondence. This can help validate your claims and establish priority in case of disputes.

  2. Use Confidentiality Agreements:
    Before disclosing your invention to anyone, such as manufacturers or investors, have them sign a confidentiality or non-disclosure agreement. This legally binds them to keep your invention secret.

  3. file Patent Applications Early:
    File patent applications as soon as possible. In many countries, including the U.S., the first to file, not the first to invent, is granted the patent. So, even if you’ve kept detailed records, someone else could beat you to the patent office.

  4. Be Cautious with Public Disclosure:
    Be aware that public disclosure of your invention before filing a patent application can bar you from obtaining patent protection in many countries. This includes public use, sale, or disclosure of your invention.

  5. Consider Trade Secret Protection:
    While patents offer limited-term protection, trade secrets can protect your invention indefinitely, as long as you keep it secret. Consider whether your invention can be kept as a trade secret instead of, or in addition to, pursuing a patent.

  6. Stay Updated with Relevant Laws:
    Intellectual property laws vary by country. Keep yourself updated with the laws in the countries where you might seek protection for your invention.

  7. Seek Professional Help:
    Consider consulting with a patent attorney or agent. They specialize in intellectual property law and can provide advice tailored to your situation and jurisdiction.

By taking these steps, you can better protect your invention and ensure that you, not someone else or the public, benefit from your hard work and creativity.

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PDIP’s U-turn: Criticizing the 12% PPN Tax Hike

by Chief Editor
written by Chief Editor

"Political Tug-of-War Over PPN 12%: PDIP‘s About-Face Raises Eyebrows

The Indonesian political landscape is abuzz with a heated debate surrounding the impending increase in Value Added Tax (PPN) to 12%, slated for 2025. The harmonization of tax regulations (HPP) law, passed in October 2021, is theLejjidad. However, the finger-pointing game has begun, with each political party trying to distance itself from the unpopular decision.

PDIP’s Rieke Diah Pitaloka recently took the floor at the DPR’s plenary meeting, urging President Prabowo Subianto to reconsider the PPN hike, even suggesting it as a New Year’s gift for the people. She proposes implementing self-assessment monitoring systems in tax management and believes that taxes can be a tool to combat corruption. Her plea has been met with mixed reactions, with some questioning PDIP’s sincerity, given their role in passing the HPP law.

Gerindra’s Wihadi Wiyanto was quick to counter, reminding everyone that the decision to raise PPN lies with the HPP law, a product of the previous DPR period, spearheaded by PDIP. He accused PDIP of having a ‘U-turn’ attitude, now asking for the government to step in. Wihadi further criticized PDIP for their role in initiating the PPN increase, now trying to distance themselves from the decision.

Sara Gerindra, Rahayu Saraswati Djojohadikusumo, added fuel to the fire, expressing her surprise at PDIP’s sudden opposition to PPN 12% when they were instrumental in its initiation during their tenure as chairs of the relevant committee. She questioned PDIP’s motives and genuine commitment to the people’s best interests.

PDIP’s Dolfie Othniel Frederic Palit attempted to deflect the blame, claiming that the HPP law is an Initiative of the Jokowi administration. He highlighted that the law, modeled after an Omnibus Bill, modifies several tax laws and introduces voluntary taxpayer disclosure and carbon tax programs. While acknowledging the government’s right to alter the PPN rate within a 5-15% range, he emphasized the need for balanced economic growth and increased welfare for the people.

As the political wrangling continues, one thing is clear: the PPN 12% increase is seemingly here to stay, barring any unexpected U-turns or political maneuvering. Only time will tell how this tax hike will affect the Indonesian economy and the people’s livelihoods.

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