DIGIVESTASI - The new Value-Added Tax (VAT) rate of 12% will take effect on January 1, 2025. This revised rate applies uniformly to all types of transactions, whether conducted in cash or non-cash. However, consumers will only be charged VAT on the goods or services they purchase, with no additional VAT applied to payments made via QRIS or other non-cash methods.

Bank Indonesia clarified that VAT will be calculated based on the service fees charged by Payment Service Providers (PJP) to merchants, including the Merchant Discount Rate (MDR). "This VAT will not be charged to consumers, as has been the case up to now," Bank Indonesia stated on its official Instagram account, @bank_indonesia, Saturday (December 28, 2024).

Furthermore, Bank Indonesia reminded the public that the MDR for QRIS has been set at 0% since December 1, 2024, for transactions up to IDR 500,000 with micro-business (UMI) merchants. As a result, VAT on MDR for such transactions amounts to zero. "Micro-business entrepreneurs (UMI) will not incur additional costs, and the public can continue to use QRIS," BI added.

Meanwhile, the Ministry of Finance, through the Directorate General of Taxes (DGT), ensured that the inflationary impact of this VAT increase would remain minimal. Dwi Astuti, Director of Extension, Services, and Public Relations at DGT, stated that current inflation stands at 1.6%, and the VAT rate hike is expected to contribute only a 0.2% increase to inflation.

"Inflation will continue to be controlled within the 2025 state budget target range of 1.5%-3.5%. Therefore, the VAT rate increase will not significantly impact public purchasing power," she explained. She also referred to the 2022 increase in VAT from 10% to 11%, which did not trigger a spike in the prices of goods or a decrease in purchasing power.

However, several business and banking representatives expressed differing views. Efdinal Alamsyah, Compliance Director of PT Bank Oke Indonesia Tbk (DNAR), argued that the VAT hike could drive up the prices of goods and services, potentially weakening consumer purchasing power. This, in turn, could affect demand for consumer credit, such as mortgages (KPR), vehicle loans (KKB), and others.

"This decline in purchasing power could reduce the demand for consumer loans," Efdinal told CNBC Indonesia.

Welly Yandoko, Executive Vice President of Consumer Loans at PT Bank Central Asia Tbk (BCA), noted that the VAT increase would pose challenges for the property sector, particularly in the sale of primary properties in 2025. "These challenges stem from two factors: rising property prices due to higher construction material costs and economic uncertainty affecting consumer purchasing power," he stated.

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