Indonesia's PPN (Value Added Tax) Rises to 11%, Second Highest in ASEAN

Economics & Macro

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Adi Ahdiat 23/03/2022 09:30 WIB

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Although claimed to be low on a global scale, Indonesia's 11% VAT rate is actually quite high in Southeast Asia.

ASEAN Countries' VAT/GST/Indirect Tax Rates (2022)

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Indonesia's PPN (Value Added Tax) Rises to 11%, Second Highest in ASEAN

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ASEAN Countries' VAT/GST/Indirect Tax Rates (2022)

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Indonesia's Value Added Tax (VAT) rate will increase from 10% to 11% starting April 1, 2022.

This rate increase is based on the Harmonization of Tax Regulations Law (UU HPP) signed in October 2021.

According to Finance Minister Sri Mulyani, Indonesia's new VAT rate is still relatively low and below the global average.

“The average VAT worldwide is around 15%, if we look at OECD countries and others, Indonesia is at 10%. We are raising it to 11%, and then to 12% in 2025,” said Sri Mulyani in her official statement on Tuesday (March 22).

Although claimed to be low on a global scale, the 11% VAT rate is actually among the highest in Southeast Asia.

Here's a breakdown of VAT, Goods and Services Tax (GST), or other indirect taxes equivalent to VAT in Southeast Asian countries:

1. Philippines: 12%
2. Indonesia: 11% (starting April 1, 2022)
3. Malaysia: 10%
4. Vietnam: 10%
5. Cambodia: 10%
6. Singapore: 7%
7. Laos: 7%
8. Thailand: 7%
9. Myanmar: 5%
10. Brunei: no VAT

Based on this data, Indonesia's new VAT rate is the second highest in Southeast Asia.

Singapore also plans to raise its VAT rate from 7% to 9%. However, the increase will only be implemented in 2023-2024.

Laos initially implemented a 10% VAT. However, since December 2021, the rate has been reduced to 7% to support the recovery of the Laotian economy from the impact of the Covid-19 pandemic.

(Also read: Economy Recovers, Tax Revenue Realization Up 59% in Early 2022)

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."