Indonesia Waters Down Planned VAT Hike In Last-Minute Move (1)

Indonesia scaled back its planned increase in the value-added tax rate just hours before it was set to take effect on January 1 amid escalating public outcry.

The VAT rate will be increased to 12% only for goods and services that are already subject to existing luxury tax, such as private jets, yachts and pricier houses, President Prabowo Subianto said in a speech on Tuesday after unexpectedly attending the yearend meeting of the finance ministry.

All other goods and services will be subject to the current rate of 11%, Prabowo said. The VAT exemption or 0% VAT granted for basic ...