The government announced that the value-added tax (VAT) rate will continue to rise starting January 1, 2025, under Law Number 7 of 2024 on the Harmonisation of Tax Regulations.
“Under the mandate of the HPP Law, this is in accordance with the predetermined schedule, the VAT rate next year will increase to 12 per cent as of January,” said Coordinating Minister for the Economy Airlangga Hartarto at the Press Conference on the Economic Stimulus Package for Welfare, as reported by Kompas.
However, he said, the 12% VAT rate does not apply to goods needed by the community or essential basic needs, the details of which are regulated in Presidential Regulation (Pepres) Number 59 of 2020. These staples are actually given a VAT-free facility.
The group of goods exempted from VAT are necessities, including rice, meat, fish, eggs, milk, and sugar. In addition, VAT exemptions also apply to education, health, public transportation, labour, financial services, insurance services, polio vaccines, and water usage.
Unfortunately, streaming and music services such as Netflix and Spotify do not get privileges like necessities. So, get ready for your subscription fees to increase starting next year.
Here are the estimated subscription prices for Netflix, Spotify, YouTube Premium and several digital streaming services in Indonesia.
1. Netflix
Mobile Plan: from IDR 59,940 to IDR 60,480
Basic Package: from IDR 72,150 to IDR 72,800
Standard Package: from IDR 133,200 to IDR 134,400
Premium Package: from IDR 206,460 to IDR 208,320
2. Spotify
Mini Package: from IDR 11,877 to IDR 11,984
Individual Package: from IDR 61,039 to IDR 61,589
Family Package: from IDR 96,459 to IDR 97,328
Duo Package: from IDR 79,354 to IDR 80,069
Student Package: from IDR 30,525 to IDR 30,800
List of Luxury Goods subject to 12% VAT
Indonesia’s Finance Minister, Sri Mulyani Indrawati, said that these premium goods and services are used by the upper middle class who fall into the 9-10 decile category.
One of the luxury products or services subject to 12% VAT includes the education sector.
“In this case, for those whose tuition fees can reach hundreds of millions,” said Sri Mulyani.
The government will impose a 12% VAT increase on the premium health service sector, including VIP class hospitals.
The following is a complete list of luxury goods and services subject to 12% VAT:
1. Premium rice
2. Premium fruits
3. Premium meat (wagyu, Kobe meat)
4. Expensive fish (premium salmon, premium tuna)
5. Premium shrimps and crustaceans (king crab)
6. Premium education services
7. Premium medical health services
8. Electricity of household customers 3500-6600 VA