The Government Has Established A 12 Percent Value-added Tax And Is Preparing An Economic Stimulus Package

ANTARA/Imamatul Silfia

The Government Has Established A 12 Percent Value-added Tax And Is Preparing An Economic Stimulus Package

Tuesday, 17 Dec 2024

The government has prepared a series of incentives in the form of an Economic Stimulus Package in response to the implementation of a 12 percent Value Added Tax (VAT) next year.

Coordinating Minister for Economic Affairs Airlangga Hartarto announced that the 12 percent VAT rate is set to take effect on January 1, 2025, in accordance with the mandate of Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (HPP).

“To ensure that the welfare of the community is maintained, the government has developed an Economic Stimulus Package that will be provided to various segments of society,” stated Airlangga during a press conference on Economic Policy Packages: Accelerating Inclusive and Sustainable Economic Growth, held at the Coordinating Ministry for Economic Affairs in Jakarta on Monday.

Airlangga noted that the policy mix has been designed with consideration for the principles of fairness and mutual cooperation. The government will also continue to offer VAT exemptions or a 0 percent VAT rate for goods and services essential to the general public and that significantly impact the livelihoods of many.

These goods and services include basic necessities such as rice, meat, fish, eggs, vegetables, fresh milk, consumer sugar, educational services, healthcare services, public transportation services, labor services, financial services, insurance services, books, polio vaccines, simple and very simple houses, subsidized housing, as well as electricity and drinking water usage.

Airlangga elaborated that for low-income households, the stimulus provided will include a Government-Borne VAT (DTP) of 1 percent from the 12 percent VAT policy for essential goods and important items (Bapokting) such as cooking oil, wheat flour, and industrial sugar, thereby maintaining the VAT at 11 percent. This Bapokting stimulus is crucial for preserving the purchasing power of the community, particularly in meeting basic needs.