Indonesia’s value-added tax (VAT) system is struggling to balance the need to generate sufficient revenue for public services while avoiding regressivity, according to an analysis published by the East Asia Forum.
The Indonesian government has unveiled a series of economic stimulus packages totaling 827 trillion Rp (51.65 billion USD) for 2025, designed to mitigate economic shocks and address the weakening purchasing power of low- and middle-income groups.
Indonesia will offer a sales tax incentive on Government-borne Luxury Goods (PPnBM DTP) of 3% for hybrid cars from next year.
The Law on the Value Added Tax was adopted at the 8th session of the 15th National Assembly (NA) in Hanoi on November 26 and is set to come into force in July next year.
The Philippines extends a 12% VAT to non-resident digital service providers, targeting platforms like Netflix and Amazon under new law.