ShoppingUnder the revision, tourists are eligible for VAT refunds with a lower minimum spend.

Indonesia to relax VAT refund requirements for tourists

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The Indonesian government is working out a revised VAT refund policy to enable tourists to claim refunds with a lower minimum spend. Photo Credit: asiandelight/Getty Images
The Indonesian government will be relaxing its value-added tax (VAT) policy that will enable tourists to get tax refunds on a lower minimum retail spend, a move that aims to spur tourist spend at small and medium enterprises (SMEs). 

The revised regulation will enable foreign tourists to apply for VAT refunds on purchases of more than Rp 500,000 (US$36) in value, down from the current Rp 5 million. 

They will also be able to present multiple transaction receipts instead of a single one to claim the refund, according to Finance Ministry’s director general for taxation Robert Pakpahan said. 

Currently, foreign tourists are eligible for VAT refunds for goods will also have to be purchased within a month before the tourists’ departure. But the prevailing regulation also excludes foreign tourists who are staying longer than two months. 

According to the official government website, only five international airports are currently able to provide VAT refunds, namely Soekarno-Hatta Airport in Cengkareng, Banten; Kualanamu Airport in Medan, North Sumatra; Adisucipto Airport in Yogyakarta; Juanda Airport in Surabaya, East Java; and Ngurah Rai Airport in Denpasar, Bali.

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