What’s New for Indonesia’s Businesses?
March 2025
IDX Sustainability Reporting
The Indonesia Stock Exchange (IDX) recently integrated its new environmental, social, and governance (ESG) reporting method into the Exchange’s Information Disclosure System for Listed Companies (SPE-IDXnet). Through Form E020, related to annual reports and sustainability reports, this development promotes the implementation of ESG principles in the Indonesian capital market, and supports the enhancement of governance and transparency of ESG data from companies listed on the IDX.
With ESG reporting the number, quality, and transparency of ESG-related data disclosed by listed companies is expected to increase. Improved ESG reporting is also expected to strengthen the IDX as an attractive investment destination, and support the advancement of the Indonesian capital market.
Investors in Indonesia are increasingly considering the sustainability and ESG aspects of listed companies before making investment decisions. Ultimately, ESG reporting can assist investors in making decisions that comprehensively prioritize sustainability.
Personal Data Protection Law
Indonesia's new data privacy law, officially known as the Personal Data Protection Law (PDP Law) establishes a comprehensive framework for safeguarding personal data within and beyond Indonesia's borders. This new legal framework signifies Indonesia's commitment to aligning its data protection practices with international standards, ensuring greater transparency and accountability in handling personal data.
The PDP Law introduces criminal sanctions for violations, including fines and imprisonment. It also establishes a Data Protection Authority to oversee enforcement and handle complaints. Modeled after the EU's General Data Protection Regulation (GDPR), the PDP Law mandates that organizations obtain explicit consent from individuals for data collection and processing. It also grants individuals rights to access, rectify, and erase their personal data.
The law also imposes obligations on data controllers and processors, including implementing security measures and notifying authorities of data breaches. Cross-border data transfers are restricted unless the recipient country offers an adequate level of protection or appropriate safeguards are in place.
VAT Tax Increase
Indonesia raised its Value Added Tax (VAT) rate on certain luxury goods from 11% to 12%, effective January 1, 2025. This increase is a significant fiscal policy shift and is part of the government’s broader strategy to boost state revenue, fund infrastructure projects, and address social welfare needs. While the measure is seen as necessary by many economists, it has sparked debates among businesses, consumers, and policymakers.
“The 12% VAT rate is applicable to the import and domestic delivery of luxury taxable goods which are currently subject to the Luxury-goods Sales Tax. These include some motor vehicles, private residences with a selling price of over IDR 30 billion, private aircraft, luxury private cruisers, etc. While for others goods and services the effective VAT rate is still 11%. As usual, the Input VAT related to these transactions can be credited,” says Mr. Dicky Darmawi, tax division head at Moores Rowland Indonesia.
“The VAT adjustment is part of a series of tax reforms aimed at aligning Indonesia’s tax policies with global standards. A 12% VAT rate on some luxury items places Indonesia closer to the average rate in Southeast Asia, enhancing its competitiveness in the region while ensuring sufficient funds for critical public services.”
Moores Rowland Indonesia’s expertise helps to protect clients from legal battles with the government, severe penalties, and negative public relations through its comprehensive legal support for PDP, tax audits and sustainability report assurance.
Take the hassle and fear of errors in your personal or company reports, and feel confident when signing off on them, with Moores Rowland Indonesia.
