Indonesia unveils US$50 billion economic policy package to ease VAT hike impact
Indonesia has unveiled an economic policy package to soften the blow of an increase in value-added tax (VAT) on goods and services from Jan 1. The stimulus package, worth more than US$50 billion, is aimed at supporting the weakening purchasing power of middle- and low-income communities. VAT will be increased to 12% from the current 11%. The coordinating minister for economic affairs has said that the new rate will not apply to goods needed by the public, or what can be considered essential basic necessities. But so-called "premium" versions of some basic needs such as rice, fruit, meat and healthcare among others, will still be taxed at 12%. Chandni Vatvani reports from Jakarta.
Indonesia has unveiled an economic policy package to soften the blow of an increase in value-added tax (VAT) on goods and services from Jan 1. The stimulus package, worth more than US$50 billion, is aimed at supporting the weakening purchasing power of middle- and low-income communities. VAT will be increased to 12% from the current 11%. The coordinating minister for economic affairs has said that the new rate will not apply to goods needed by the public, or what can be considered essential basic necessities. But so-called "premium" versions of some basic needs such as rice, fruit, meat and healthcare among others, will still be taxed at 12%. Chandni Vatvani reports from Jakarta.
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