<![CDATA[The determination of Value Added Tax (VAT) rates constitutes an essential element of taxation that must be based on the principle of tax legality as mandated by Article 23A of the 1945 Constitution of the Republic of Indonesia. Law Number 7 of 2021 stipulates a VAT rate of 12%, applicable no later than 1 January 2025, while Minister of Finance Regulation Number 131 of 2024 applies the full 12% rate to luxury taxable goods and uses another tax base for other transactions, resulting in an effective VAT burden of 11%. This difference in mechanism raises legal issues concerning the conformity of the regulation with the principle of tax legality and the limits of delegated authority granted by law. This research aims to analyze the conformity of VAT regulation under Minister of Finance Regulation Number 131 of 2024 with the principle of tax legality and the hierarchy of laws and regulations. This study employs normative legal research using statutory and conceptual approaches. Legal materials are analyzed qualitatively based on the principle of tax legality, the principle of lex superior derogat legi inferiori, and the principle of conformity between the type, hierarchy, and substance of legislation. The findings indicate that Minister of Finance Regulation Number 131 of 2024 has a formal legal basis as an implementing regulation; however, its substantive provisions raise legal concerns because the use of another tax base mechanism substantially affects the application of the VAT rate. Furthermore, Article 7 paragraph (3) of Law Number 7 of 2021 stipulates that changes to the VAT rate must be regulated through a Government Regulation. Therefore, Minister of Finance Regulation Number 131 of 2024 is not fully consistent with the principle of tax legality, particularly concerning the limits of delegated authority in regulating matters related to essential elements of taxation.]]>
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