Increasing the value-added tax (VAT) rate has been identified as an option to increase tax revenue although the possible effect of changing the VAT rate on tax compliance behavior has not been determined. It is planned that the value added tax (VAT) rate will increase on April 1, 2022. The amount of the increase is from 10 percent to 11 percent. The increase in VAT rates follows the passage of Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (UU HPP). While the HPP Law itself regulates the increase in VAT to 11 percent as of April 1, 2022, then it will be followed by an increase to 12 percent no later than January 1, 2025. The purpose of this VAT rate increase is an effort to increase tax revenue and create equality in tax payments. However, most people do not easily accept the 11 percent VAT rate increase.
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