Jakarta. The proposed increase in the Value Added Tax (VAT) rate to 12 percent in 2025, which has faced widespread criticism, remains a topic of discussion and has not yet been finalized, according to Adies Kadir, Vice Chairman of the Indonesian House of Representatives (DPR) for economic affairs. Adies said that the decision on the VAT hike will be made by President Prabowo Subianto after he returns from his overseas trip.

"The VAT proposal is still just an idea, and it will be discussed further after President Prabowo's return. We need to wait for the President to come back before speculating on any increases," Adies said at the Parliament Complex in Jakarta on Tuesday.

Prabowo began his international trip on November 8, 2024, with plans to return by November 23, 2024. The President has already visited China, the United States, and Peru for the APEC Summit. He is currently in Brazil for the G20 Summit and is set to visit London, England next.

Adies said that President Prabowo would prioritize the welfare of the people and that policies under his administration would align with the public’s best interests. He assured that Prabowo’s government would avoid causing hardship to the public during its five-year term.

“We are confident that President Prabowo will always ensure that the people are not burdened,” Adies, who is also the deputy chairman of the Golkar Party, added.

He encouraged the public to wait for an official decision from President Prabowo. Once a decision is made, further discussions will be held with the DPR.

“If there is a VAT increase, it will be thoroughly calculated and considered to ensure it does not harm the people,” Adies explained. "If the increase happens, it will be implemented properly, but we are still waiting for the President’s decision."

Meanwhile, Indonesia’s Finance Minister, Sri Mulyani Indrawati, confirmed last week that the government is ready to implement the VAT rate hike from 11 percent to 12 percent starting Jan. 1, 2025. 

Sri Mulyani reassured lawmakers that while the proposed VAT hike is controversial, there are no plans to delay its implementation due to the current state budget and fiscal conditions. "We are prepared for this change and have the necessary legal framework in place to proceed," she said during a meeting with the DPR's Commission XI on Nov. 13.