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The Form Of Economic Stimulus Package From The Government Following The Increase Of VAT To 12 Percent

The government has prepared a series of incentives in the form of an Economic Stimulus Package following the establishment of the Value Added Tax (VAT) at 12 percent, effective January 1, 2025. Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the implementation of the 12 percent VAT rate aligns with the mandate of Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (HPP). "To ensure the welfare of the community is maintained, the government has prepared incentives in the form of an Economic Stimulus Package that will be provided to various segments of society," he remarked during a press conference on the Economic Policy Package: Accelerating Inclusive and Sustainable Economic Growth held on Monday, December 16, 2024. 

Airlangga indicated 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. 

The categories of goods exempt from VAT include staple foods, such as rice, meat, eggs, fish, milk, and consumer sugar. Additionally, VAT exemptions will apply to services in education, healthcare, public transportation, labor, financial services, insurance, polio vaccinations, and water usage. 

Economic Stimulus Package 2025   

Airlangga detailed 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 Goods (Bapokting), which includes Minyakita, wheat flour, and industrial sugar. Consequently, the VAT imposed will remain at 11 percent. As reported by Antara, this Bapokting stimulus is crucial for maintaining the purchasing power of the public, particularly in meeting basic needs. 

Tag: Airlangga VAT