Purbaya Reviews New VAT Scheme on Gold Jewelry
JAKARTA. Minister of Finance Purbaya Yudhi Sadewa plans to revise the mechanism for collecting VAT on gold jewelry. The proposed change comes in response to numerous reports from the Indonesian Jewelry Manufacturers Association regarding the rise of illegal manufacturers selling directly to consumers without paying taxes.
“As a result, they don’t pay taxes. Meanwhile, legal (official) manufacturers pay 1.1% at the factory level and 1.65% VAT on consumer sales. So that’s nearly 3%,” said Purbaya, as quoted by CNBCIndonesia.com.
The Indonesian Jewelry Manufacturers Association has requested that VAT no longer be charged to consumers but instead be imposed directly at the manufacturer level. This request aims to create a level playing field between official and illegal producers.
In response, Purbaya opened the possibility of applying a single 3% VAT rate at the manufacturer level, or from manufacturers to traders, while eliminating VAT at the consumer level. “Their proposal is for a flat 3% charge. So consumers no longer pay, only the manufacturers. That way, we can control it more effectively,” he stated.
For reference, the current VAT rules for gold jewelry are governed by Minister of Finance Regulation (PMK) Number 11 of 2025, which revises PMK 48/2023. Under the regulation, VAT on gold jewelry is applied progressively depending on the distribution channel. If the product is sold from a manufacturer to a trader or another manufacturer, the effective rate is 1.1% of the selling price. However, if sold directly to end consumers, the rate increases to 1.65%. For gold jewelry traders, the rate also depends on whether they have a VAT invoice from the previous purchase. Traders with an invoice are subject to a 1.1% VAT, while those without are subject to 1.65%. Meanwhile, sales from traders to manufacturers are subject to a special 0% VAT rate.
In addition to selling gold, manufacturers or traders who provide services such as modification, repair, plating, or cleaning of jewelry are still subject to VAT at 1.1% of the service fee. (KEN)
