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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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The Fate of Prabowo’s PPN Batal Naik Program After Rp75T HANGUS Imbas

by Chief Editor
written by Chief Editor

Headline: Indonesia Shelves PPN Hike, Losing Out on Rp75 Trillion in Revenue

Subhead: Government scraps planned 12% VAT increase, impacting APBN 2025 and presidential programs

Article:

In a policy U-turn, the Indonesian government has abandoned plans to raise the value-added tax (VAT) or pajak pertambahan nilai (PPN) from 11% to 12% as of January 1, 2025. This decision, announced by Wakil Ketua DPR RI Sufmi Dasco Ahmad, has significant fiscal implications, with the government set to miss out on potential revenue of Rp75 trillion.

Theatetration of a 12% PPN would have only applied to barang mewah (luxury goods), a departure from the original plan to implement it across all goods and services. According to Dasco, the new policy change means that instead of the projected Rp75 trillion, the government will only gain an additional Rp3.2 trillion in additional APBN funds for 2025.

Menteri Keuangan Sri Mulyani Indrawati played down the impact of the lost revenue, saying that the APBN management for 2025 is still dynamic and will be updated monthly. Dirjen Pajak Suryo Utomo acknowledged the loss but asserted that they would explore other avenues to boost tax revenue.

The decision to scrap the PPN hike could pose challenges for President Prabowo Subianto‘s administration, which has ambitious spending plans, including the Makan Bergizi Gratis (MBG) program, budgeted at Rp71 trillion this year. Analysts suggest that while the lost revenue will impact the fiscal position, it may not directly affect Prabowo’s flagship programs.

Ronny P Sasmita, Senior Analyst at the Indonesia Strategic and Economic Action Institution, argues that the government might consider raising debt or reallocating funds from low-priority projects to offset the lost revenue. However, he believes that Prabowo is unlikely to cut fuel subsidies to fund other programs due to the potential political backlash.

Yusuf Rendy Manilet, Economist at the Center of Reform on Economics (Core) Indonesia, agrees that the government has some room to maneuver and can consider optimizing revenues from other sectors, digitalizing taxation systems, and improving governance to compensate for the lost PPN increase.

Meanwhile, sustainability experts propose alternative revenue-generating measures. Tata Mustasya from SUSTAIN Indonesia suggests raising export taxes on coal and nickel to generate potentially Rp84.55 trillion to Rp353.7 trillion yearly. Abdurrahman Arum of Transisi Bersihi adds that a 10%-20% export tax on nickel products could generate Rp50 trillion to Rp100 trillion annually.

In conclusion, the Indonesian government’s decision to scrap the PPN hike has significant fiscal implications, posing challenges for President Prabowo’s administration. To offset the lost revenue, the government should explore various fiscal policy adjustments, improved governance, and revenue-generating measures to maintain its ambitious spending plans while ensuring fiscal sustainability.

Keywords: PPN, VAT, Indonesia, Prabowo Subianto, APBN 2025, Makan Bergizi Gratis, fiscal policy, revenue

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First President to Witness the Closing of the APBN

by Chief Editor
written by Chief Editor

Historic First: President Prabowo Subianto Visits Finance Ministry to Witness 2024 APBN Budget Closure

In a unprecedented move, President Prabowo Subianto made history by visiting the Ministry of Finance on December 31, 2024, to personally witness the closure of the 2024 State Budget. This is the first time a president has attended this event, marking a significant milestone in the country’s fiscal history.

Minister of Finance Sri Mulyani Indrawati disclosed the president’s visit during the Opening Ceremony of the Indonesia Stock Exchange (BEI) for the Year 2025 on Thursday, January 2, 2025. She noted, "For the first time, a president is coming to the Ministry of Finance to witness the closure of the APBN [State Budget]."

The minister humorously added that the president’s visit was not just ceremonial, but also to personally interact and give instructions. "He might also want to see how much money is finally there," she said, laughing.

President Prabowo’s visit occurred from around 4 pm until Maghrib, during which the ministry briefed him on the implementation of the 2024 APBN. Sri Mulyani praised the APBN 2024 closure as a significant success, with a fiscal deficit notably lower than initially projected — below 2.7% of GDP.

"The APBN 2024 was closed with a deficit nearing the initial APBN Law (2.29%). This is an outstanding result, much lower than the initially projected 2.7%," she said. Although she refused to reveal the exact deficit figure, she assured that the ministry’s performance report for APBN 2024 would be released soon.

Sri Mulyani optimistically concluded, "The APBN 2024 was closed in a relatively healthy and secure manner, providing a strong foundation for the year 2025."

Watch: ‘Sri Mulyani Reveals the Condition of the 2024 APBN: Deficit Significantly Reduced’

(aid/kil)

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"Mahfud Condemns Corruptors, Terms Excessive Peace Talk as Collusion"

by Chief Editor
written by Chief Editor

Former Minister Mahfud MD Slams Proposal for Settling Corruption Cases via ‘Denda Damai’

Jakarta, CNN Indonesia — Former Coordinating Minister for Political, Legal, and Security Affairs Mahfud MD has strongly condemned the proposal to settle corruption cases through a ‘denda damai’ (out-of-court settlement) system, recently advocated by Minister of Law Supratman Andi Agtas.

Mahfud argued that it’s wrong to suggest such an idea as corruption cases cannot be resolved through peaceful means. "It’s not just a mistake, it’s completely incorrect. Corruption cases cannot be settled peacefully. If settled peacefully, it would no longer be corruption; it would be called collusion," Mahfud said at the MMD Initiative office in Jakarta on Thursday (26/12).

Mahfud also pointed out that such a practice already exists informally between law enforcement agencies. "It happens all the time, secretly, between prosecutors, police, and judges. And when they’re caught, they end up in prison," he added.

The former minister emphasized that the Corruption Eradication Commission (KPK) Law and other criminal proceedings do not permit the application of ‘denda damai’ for corruption cases. He was surprised that the Minister of Law attempted to justify this practice by referring to the Law on the Prosecutors’ Office.

Mahfud explained that the ‘denda damai’ provision in the Law on the Prosecutors’ Office only applies to economic crimes related to customs, tax, and excise duties. It’s a negotiation process to lower punitive fines.

"For instance, if you’re supposed to pay a Rp100 billion fine for violating tax laws but end up paying Rp95 billion instead, that’s considered ‘denda damai’. But this process is transparent, done with the approval of the relevant ministry and the Attorney General," Mahfud said.

Previously, Minister of Law Supratman had planned to offer amnesty to state loss perpetrators through ‘denda damai’. The minister believes that the prosecutor general has the authority to impose ‘denda damai’ as permitted by the Law on the Prosecutors’ Office. However, he did not clarify how this would apply to corruption cases.

"Denda damai", according to Supratman, involves discontinuing the court process and imposing a fine agreed upon by the Attorney General. This can be used to manage cases causing state losses.

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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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Understanding the 12% PPN on Rice: A Guideline for Consumers

by Chief Editor
written by Chief Editor

Headline: Indonesia Spared From New PPN Rate; Rice Among Exempted Commodities

Subheading: National Food Agency (NFA) assures consumers that staple food items, including locally produced rice, will not bear the increased 12% PPN rate.

Article:

In a recent announcement, the National Food Agency (NFA) has clarified that Indonesia’s staple food items, particularly locally produced rice, will not be subject to the impending 12% Pajak Pertambahan Nilai (PPN) tax increase. The new PPN rate, set to take effect in 2025, will not apply to strategic food commodities, as confirmed by NFA Head, Arief Prasetyo Adi.

"We understand the significance of rice in Indonesia’s dietary landscape and have ensured that it remains exempt from the PPN increase," Adi explained in a written statement, obtained on Wednesday (25/12/2024).

The exemption extends to locally produced rice, including special varieties like aromatic rice. However, imported rice like the premium ‘Shirataki’ from Japan will be subject to the increased 12% PPN rate, as confirmed by Coordinating Minister for Food Zulkifli Hasan (Zulhas). This is to ensure that the increased tax burden falls primarily on luxury or imported goods, rather than basic commodities.

The NFA has submitted a proposal to the Ministry of Finance, suggesting that the 12% PPN rate should only apply to specific imported rice varieties that are not produced domestically. This stance aligns with the regulations outlined in Peraturan Badan Pangan Nasional (Perbadan) No. 2/2023, which categorizes rice into ‘prime’ and ‘medium’ variants based on their degree of wholesomeness and broken kernels.

"Rice, particularly premium varieties, is widely consumed and distributed across all market sectors," said Adi. "The government is taking steps to ensure it is not classified as a luxury good, thereby avoiding increased PPN charges."

PPN is a form of value-added tax that is levied on goods and services in Indonesia. The 1% increase, from 11% to 12%, is expected to generate additional state revenue while maintaining Indonesia’s competitiveness in the global market.

Citations: (rrd/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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Revealed: Only Certain Types of Rice Are Subject to PPN

by Chief Editor
written by Chief Editor

Headline: Indonesia‘s National Food Agency Clarifies Upcoming PPN Changes, Ensuring No Tax Hike on Key Domestic Rice

Subheadline: Rice consumers can breathe easy as the government ensures no tax increase on locally produced staple, targeting only imported and premium varieties.

Article:

The Indonesian government has moved to reassure consumers that its plan to increase the Value Added Tax (PPN) from 11% to 12% next year will not affect locally produced staple rice. The National Food Agency (NFA) confirmed that rice will remain exempt from the tax hike, with only certain imported and premium varieties set to be impacted.

Arief Prasetyo Adi, head of the NFA, explained that the PPN increase will not apply to strategic staple foods, particularly domestic rice. He clarified that the 12% tax will only be applied to specific imported rice types, mainly those intended for commercial use, such as in hotels and restaurants.

"Only special imported rice, like that used for hotels or restaurants, will face the 12% PPN. For instance, premium rice is typically imported because it can’t be produced locally. However, we’re ensuring that local aromatic rice varieties are tax-exempt to support our farmers," Adi stated in a written statement.

The qualification of rice types is defined in the National Food Agency Regulation No. 2/2023, which categorizes rice into general, premium, and medium grades based on milling quality and broken grains.

In line with this, the NFA has proposed to the Ministry of Finance that the PPN increase should only apply to certain imported rice types not produced domestically, as per Article 3(5) of Perbadan 2/2023.

Adi further highlighted the popularity and widespread distribution of premium rice, stating that it’s not considered a luxury good and will remain exempt from the PPN increase. Additionally, he revealed that the government plans to distribute medium-quality, high-standard rice through the Food Logistics Agency (Bulog) to 16 million low-income households starting January and February next year.

In a broader context, the government has announced a stimulus package to counterbalance the PPN increase, including a rice assistance program for 16 million beneficiaries. Each month, Perum Bulog will distribute 160,000 tons of rice to these recipients, as mandated by the NFA.

The number of beneficiaries has been adjusted to reflect a decrease in the poverty rate, which stood at 25.22 million people in March 2024, down from 26.81 million in March 2023. The program will target the poorest and most vulnerable segments of society, including the elderly and female household heads living in poverty.

Other related programs, such as the Free Nutritious Meal program and the Rice Price Stabilization and Supply Support program, will continue to run in 2025. The latter program will distribute 150,000 tons of rice monthly in January and February.

Watch this video for more info: Government Allocates IDR 265.6T for PPN Incentives on Basic and Educational Materials

(Rrd/rrd)

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**" Not Blaming Pak Prabowo: A Clarification"

by Chief Editor
written by Chief Editor

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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