Indonesia VAT Hike in Doubt as Lawmakers Show Emerging Rifts (1)

Indonesia’s planned increase to the value-added tax could be in question after several lawmakers called for a delay, showing how rifts may be emerging in parliament as the largest ruling party is set to fall to opposition.

Several lawmakers in the commission overseeing the economy urged the government to delay the VAT hike from next year as it may damp consumers’ purchasing power, they said in a Tuesday meeting with Finance Minister Sri Mulyani Indrawati. The government plans to raise the VAT rate to 12%, from 11%, as stated in a law passed in 2021.

“Higher tax rates will ...