Govt lifts VAT from primary products

The Jakarta Post, Jakarta

In order to boost the farm sector, the government has lifted value-added tax (VAT) on a variety of goods and commodities, including agricultural machinery and primary agricultural products.

Under a new government regulation, there are six categories of goods that will be exempted from VAT.

These include capital goods, such as engines, factory machines and machine tools, both in knocked-down or built-up form, and feeds and feed ingredients for livestock, fowl and farmed fish.

Also exempted from VAT are farm produce, seeds for agriculture and market gardening, fish and livestock seed, clean water distributed through pipes, and electricity, except for domestic use, where the power supply is higher than 6,600 watts.

The new regulation provides that agricultural produce, including that produced by enterprises operating in the agricultural, market-gardening and forestry sectors, will also be exempted form VAT.