ANN/THE JAKARTA NEWS – Subscribers in Indonesia are facing a 12-per-cent increase in value-added tax (VAT) on certain digital services, despite a government announcement at the end of the year that the new rate would not apply to digital services.
While direct purchases through providers’ websites or apps remain unchanged, Google Play transactions are now subject to the new tax.
For example, the cost of subscribing to Spotify’s Premium Mini, previously IDR10,700 (USD0.69), has risen to IDR11,984 following the VAT adjustment last Wednesday.
Similarly, subscribers to CapCut Pro now pay a monthly fee of IDR142,240 compared to IDRT127,000 previously, while the monthly fee for designing platform Canva has jumped by IDR11,400 to IDR106,400.
Even the basic subscription plan for X Premium has also increased, and is now IDR39,000 higher at IDR364,000 per year.
Law number 7/2021 on harmonisation of tax regulations stipulates increasing the VAT rate to 12 per cent on January 1, but amid widespread backlash and in consideration of current economic conditions, the government announced at the eleventh hour that the new rate would not apply to all goods and services as initially planned.
At a press conference last week, Finance Minister Sri Mulyani Indrawati said the new 12 per cent VAT would apply only to luxury goods and services, such as private jets, yachts and luxury homes.
