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What Luxury Items Are Subject to 12% VAT?

by Chief Editor
written by Chief Editor

Title: Indonesia Hikes PPN on Luxury Goods to 12%

CNN Indonesia

The Indonesian government has officially announced a tax hike, increasing the value-added tax (PPN) from 11% to 12% exclusively for luxury goods. This was confirmed by President Prabowo Subianto and Minister of Finance Sri Mulyani at a press conference held at the Ministry of Finance on Tuesday (31/12).

Prabowo emphasized, "Let me clarify, the increase in PPN rate from 11% to 12% only applies to luxury goods and services, specifically those items that have been subject to luxury goods PPN in the past, primarily consumed by the upper classes."

So, what are the luxury goods now subject to a 12% PPN? Sri Mulyani outlined four categories covered by PPNBM (Indonesian Value-Added Tax Law) No. 15/PMK.03/2023. Here’s a breakdown:

1. PPnBM at 20%

  • High-end residences such as villas, luxury apartments, townhouses, or similar with a selling price of IDR 30 billion or more.

2. PPnBM at 40%

  • Items like hot air balloons and privately operated hot air balloons, other non-powered aircraft, and certain ammunition and firearms (excluding those for state purposes), such as bullets and their components, excluding those for airsoft guns.

3. PPnBM at 50%

  • Privately owned aircraft (excluding those subject to the 40% rate) such as helicopters and other aircraft, as well as luxury watercraft. Additionally, certain firearms and ammunition (excluding those for state purposes), such as artillery, revolvers, pistols, and other firearms and operationally fired explosive weapons.

Illustration. Luxury jets are among the items that will now be subject to a 12% PPN.

4. PPnBM at 75%

  • Luxury tourist yachts (excluding those for state purposes and public transportation), such as cruise ships, excursion boats, and other similar watercraft designed primarily for passenger transport, as well as ferries of all types (excluding those for state purposes and public transportation). Additionally, yachts are subject to this rate, excluding those for state purposes and commercial or tourism-related activities.

The government aims to widen the tax base and ensure fairer contributions from various segments of society. This initiative is expected to boost state revenue, while reducing the tax burden on common goods and services.

(blq/asr)

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Prabowo, Sri Mulyani’s Dual Perspectives on the 12% PPN

by Chief Editor
written by Chief Editor

Presidential Announcement: PPN Increase to 12% Affects Only Luxury Items

In a significant move, President Prabowo Subianto has decided to enforce an increase in the Value Added Tax (VAT) rate from 11% to 12% only for luxury items,ercising a restraint that satisfies the spirit of Law No. 7/2021 regarding the Harmonization of Fiscal Laws.

Targeted Items: Barang Mewah

The president clarified that the VAT increase will apply solely to luxurious goods and services, specifically those currently classified as Barang Mewah, or luxury goods, that are consumed by the wealthy. Items that qualify include:

  1. Luxury vehicles, such as private jets
  2. High-end watercraft like yachts
  3. Upscale residential properties with prices exceeding Rp30 billion

Minister of Finance Sri Mulyani also detailed the specific luxury items affected, which include:

  • High-end housing, such as luxury homes, apartments, and townhouses
  • Luxury aircraft and watercraft, like helicopters and yachts
  • Expensive weapons and ammunition
  • Luxury goods and services

No Impact on Essential Commodities

President Prabowo echoed the government’s commitment to maintaining the zero VAT rate for essential goods and services, ensuring that households have access to affordable basic needs. Essential commodities include:

  • Rice, corn, soybeans, fruits, vegetables, sweet potatoes, sugar, livestock, and fish
  • Groceries, medicine, education, and healthcare services
  • Affordable housing
  • Daily transportation and logistics services

Aim: Reducing Fiscal Deficit

The tax adjustment forms part of the government’s efforts to control the fiscal deficit, while minimizing the burden on the general public. As the tax base broadens, the government anticipates increased revenues, setting the stage for a return to a balanced budget by 2024.

By focusing the VAT increase solely on luxury goods and services, the government addresses fiscal concerns without imposing additional financial strain on the average Indonesian household. As economic conditions continue to improve, the government aims to implement further reforms that foster sustainable growth.

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"Prabowo’s Defense Budget Reignited: Sri Mulyani’s Impact as Minister of Defense"

by Chief Editor
written by Chief Editor

President Prabowo Emphasizes Budget Cuts, Asks for Understanding

Jakarta, Dec 30 (ISA/EVA) – President Prabowo Subianto once again stressed the importance of budget cuts, apologizing to ministries and institutions that didn’t receive their anticipated allocations. Speaking during the Coordinating Meeting for National Medium-Term Development Plan (RPJMN) 2025-2029 at the Bappenas Building in Jakarta, Prabowo acknowledged the challenging situation.

"Please understand that there are priorities, and thus some ministries and institutions may not receive the budget they anticipated," Prabowo said. He urged them to support the financial constraints, hoping not to disrupt Minister of Finance Sri Mulyani’s work.

Prabowo recounted his experiences as Minister of Defense when he faced similar constraints from then-Finance Minister Sri Mulyani. He also shared a story about his predecessor, Minister Sjafrie Sjamsoeddin, who faced budgetary challenges. Prabowo acknowledged the significance of defense but emphasized the importance of education, infrastructure, and other sectors.

"I had to think carefully about national defense, but children need to eat, don’t they? Educators deserve better wages, and judges should have decent housing. We cannot have judges living under bad conditions," Prabowo stated, referencing a recent ruling on a high-profile corruption case.

Watch Video: ‘Prabowo criticizes judges sentence: Rampant trillion-dollar plunder, sentence is just a few years’

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Mastering Indonesia’s New Tax System: A Step-by-Step Guide to Logging into ‘Coretax’ with Sri Mulyani

by Chief Editor
written by Chief Editor

Headline:
Indonesia’s Revenue Department Rolls Out Coretax DJP: Here’s What You Need to Know

Subhead:
Login, Reset Password, and Navigate the New E-Payment System Starting December 16, 2024

Byline:
Jakarta, CNBC Indonesia – The Directorate General of Taxes (DJP), Ministry of Finance, is set to begin the pilot implementation of the Coretax DJP system from December 16 to December 31, 2024. During this period, taxpayers can log in to the Coretax DJP system starting Tuesday, December 24, 2024.

Body:

DJP has confirmed that taxpayers who already have a DJP Online account can access Coretax DJP using the following steps:

  1. Login to Coretax DJP

    • User ID: Enter yourNIK (Indonesian ID Number) or NPWP (Taxpayer Identification Number)
    • Password: Enter your DJP Online password
    • Captcha Code: Enter the captcha code displayed
    • Login: Click the ‘Login’ button
  2. Reset Password
    • Select ‘Confirmation Purpose’ (either ‘Electronic Letter’ or ‘Handphone Number’)
    • Enter your email address if selecting ‘Electronic Letter’, or your handphone number if selecting ‘Handphone Number’
    • Enter the captcha code
    • Check the declaration box
    • Click ‘Send’
    • Check your email or SMS for a link to reset your password, ensuring the sender is "@pajak.go.id" for emails or "DJP" for SMS

DJP underscores the importance of creating a strong, unique password and using a passphrase (not the same as your password) as a digital signature for accessing Coretax DJP services.

While the initial phase of Coretax DJP implementation is underway, taxpayers are advised that all features and services will become fully available from January 1, 2025. Meanwhile, legal entities and government agencies should ensure their data profiles, including their point of contact (PIC), are up-to-date.

Taxpayers without a DJP Online account or individual taxpayers who haven’t linked their NIK and NPWP can make digital access requests and activate their NIK as NPWP through Coretax DJP starting January 1, 2025.

For more information on Coretax DJP, including guides, visit Coretax DJP’s portal.

Suggested Image:
An image of a laptop screen displaying the Coretax DJP login page, with clear, engaging visuals (e.g., graphs, icons, or diagrams) related to tax administration or digitization.

Call to Action:
Stay informed about Indonesia’s tax landscape and updates on Coretax DJP by following CNBC Indonesia for the latest news and insights.

Article Structure:

  • Introduction (Announcement of Coretax DJP rollout)
  • Two main sections (Login process, Password reset)
  • Closing paragraph ( Full availability, Access for new users, More information)
  • Suggested image
  • Call to action
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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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