Indonesia’s planned VAT increase from 11% to 12% in January 2025 has sparked concerns about its implications for digital transactions. Coordinating Minister for Economic Affairs Airlangga Hartarto clarified that payment systems like QRIS (Quick Response Code Indonesian Standard) and e-money are not subject to the VAT.

“QRIS does not carry VAT, just like debit card transactions,” Airlangga stated in Tangerang, Banten, on December 22, 2024. He emphasized that the 12% VAT applies only to goods, not the payment methods used. This clarification ensures QRIS remains an attractive option, particularly as it is widely adopted across Southeast Asia, including in Indonesia, Malaysia, Singapore, and Vietnam.

However, fees for services tied to e-money and QRIS are taxable. For example, charges for balance top-ups, transactions, fund transfers, and cash withdrawals will include 12% VAT. This means that if the top-up fee is IDR 1,000, the VAT increase will add IDR 120 instead of IDR 110 under the current 11% rate.

These fees have been taxable under Indonesia’s VAT regulations since 1984. The updated Harmonization of Tax Regulations Law in 2021 further detailed the scope of taxation, incorporating services like digital wallets, payment gateways, and merchant discount rates (MDR).

Airlangga also reassured the public that essential services like e-toll payments remain VAT-free. This policy reflects the government’s effort to balance revenue collection with the need to support digital payment innovation. As fintech continues to reshape Indonesia’s economy, clear and fair taxation policies are essential to its growth.

TEMPO