JAKARTA: Indonesia on Monday ( Dec 16 ) announced economic measures to soften the blow of an increase in the value-added tax (VAT ) rate, including electricity tariff cuts, incentives for labour-intensive industries, and VAT exemption on some property sales.
According to local news agency Jakarta Globe, the economic stimulus package, which totals US$ 51.5 billion, is intended to counteract the effect of the VAT boost while reducing the impact of the weakening purchasing power of low- and middle-income groups.  ,
According to finance minister Sri Mulyani Indrawati, who was quoted by the Jakarta Globe,” This complete stimulus package is designed to safeguard the market, secure the most vulnerable groups, and promote long-term green growth.”  ,
In January 2025, the government announced that it would increase the VAT rate to 12 % from the current 11 % for some goods and services, including high-quality rice, meat and fish, international schools, and some hospitals.
Top economic minister Airlangga Hartarto announced a press conference on Monday that it will exempt from VAT particular staple foods, while the government’s subsidised sugar and cheap cooking oil will not be.
He added that the house and mechanical sectors will also receive fiscal incentives.
For middle-income families, the government may reduce the power price by 50 per cent.
Additionally, the government stated that it will not collect income tax from workers in labor-intensive industries making less than US$ 10 million per month ( US$ 624.61 ).
The government had likewise enact new tax incentives for hybrid electric vehicles and increase existing ones for electric cars.
However, in the enclosure field, the government had extend Taxes exemptions for house purchases.
The housing market not only meets the basic needs of the population, but it also has a major multiple effect, generating jobs and fostering economic growth, according to Sri Mulyani, who was quoted by the Jakarta Globe.