In spite of increase in Value Added Tax (VAT) rate, Government regulates some goods that are not subject to VAT, one of which are gold bullions and gold granules. This was conveyed directly at DGT 2022 Media Briefing : VAT Rate press conference on (01/04).
Granulated gold is the basic ingredient used in production of gold bullions. Granular gold VAT provisions are governed by Government Regulation Number 70/2021 which was signed on June 28 2021 and gold bullions VAT provisions are regulated in Article 4A of the VAT Law.
The provision of VAT facilities that are not collected on the submission of certain strategic Taxable Goods is carried out in order to increase the competitiveness of domestic gold bullion and gold jewelry industry. This is due to the fact that anode slime and gold granules are the primary raw materials used in the production of gold bullion and gold jewelry. In addition, this regulation aims to support the downstreaming of gold bullion in the country.
"It is expected that our gold production will increase, and its derivatives in gold jewelry will become more competitive with other countries," said Hestu Yoga Saksama as Director of Tax Regulations I.
Yoga added that VAT exemption facility refers to the experience in many other countries. This is because gold bullion is equivalent to exchange rate. A lot of gold bullions are also kept for investment and as foreign exchange reserves.
“Most countries levied VAT only on gold jewelry, not gold bullion. As a result, there is a best practice in this context for not charging VAT on gold bullions”, said Yoga.
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