Jakarta (ANTARA) - The Indonesian government's decision to increase the value-added tax (VAT) by 1 percentage point to 12 percent will not apply to goods related to food security, according to Coordinating Minister for Food Affairs Zulkifli Hasan."There will be no increase whatsoever for any domestic food products. Period," he said after a food security meeting led by President Prabowo Subianto at the State Palace in Jakarta on Monday.
Hasan added that the 12 percent VAT will not be applied to fertilizers and seeds. The government plans to officially implement the new VAT rate on January 1, 2025.
Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the 12 percent VAT aligns with Law Number 7 of 2021 on the Harmonization of Tax Regulations.
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However, the government will maintain the VAT exemption facility for strategic goods and services. Hartarto noted that certain staple and essential goods will remain exempt from VAT, including rice, chicken meat, beef, several types of fish, chicken eggs, green chilies, red chilies, bird's eye chilies, and sugar.
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Wheat flour, subsidized cooking oil, and industrial sugar will benefit from a 1 percent government-borne VAT facility, effectively keeping their VAT rate at 11 percent.
"Sticky rice and brown rice will also see no VAT increase, particularly for all domestic food products," Hasan emphasized.
