Indonesia's VAT Relief Scheme: What the 12% Increase Actually Costs You

TL;DR

**## What We Know

Indonesia's VAT rate officially increased from 11% to 12% on January 1, 2025, under the Harmonized Tax Law (Undang-Undang Harmonisasi**

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The Facts

What We Know

Indonesia's VAT rate officially increased from 11% to 12% on January 1, 2025, under the Harmonized Tax Law (Undang-Undang Harmonisasi Peraturan Perpajakan, or UU HPP), which was passed in 2021 with the rate hike built in as a scheduled step.

Reports suggest the government introduced two parallel relief mechanisms to cushion the impact:

1. Government-Borne VAT (PPN Ditanggung Pemerintah / PPN DTP) Under this scheme, the government covers the VAT liability on behalf of the b

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Next Steps

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