The Indonesian government will raise the value-added tax (VAT) rate from 11% to 12% starting January 2025. This measure aims to increase state revenue and ensure economic stability, applying only to luxury and premium items. Essential goods, general education, and medical services will continue to benefit from VAT exemptions or reductions. The additional tax revenue generated from the VAT increase will be invested in national development programs including infrastructure, education, and health initiatives. Korean residents may experience greater price inflation as the VAT hike will be reflected in their everyday consumption, including premium hospital services and high-end food products.
