Good News! 1% Value Added Tax Increase Provides Benefits for the People and the Country’s Economy
Jakarta – The government will cover the needs of other food items subject to 12 percent Value Added Tax or VAT, which is 1 percent for the community, and has a positive impact on the country’s economy.
The Minister of Finance, Sri Mulyani Indrawati, said that the government will cover the increase in value added tax (VAT) of 1 percent for three commodities when the 12 percent VAT is implemented on January 1, 2025. The three commodities are wheat flour, sugar for industry, and people’s cooking oil or MinyaKita.
“We decided that for goods such as wheat flour, sugar for industry, and MinyaKita, the VAT will remain at 11 percent. This means that from the increase to 12 percent, the government will pay 1 percent,” explained Sri Mulyani.
The three commodities are considered very necessary for the general public, so the government has decided to implement VAT borne by the government (DTP) for the increase in VAT rates that will apply. Sri Mulyani stated that the decision was the government’s commitment to preparing fiscal instruments that side with the people.
“We understand the views of various parties. We also see data on household consumption of neighbors that remains stable. Then inflation has decreased and is even relatively low at 1.5 (percent),” she explained.
Meanwhile, the Coordinating Minister for Economic Affairs, Airlangga Hartarto said the government will cover the needs of other food ingredients subject to 12 percent VAT, which is 1 percent which is designed to provide direct relief to groups of people who are included in the low-income category.
“Other food ingredients with the implementation of 12 percent VAT, the government provides stimulus or economic policy packages for low-income households, the VAT is borne by the government 1 percent,” said Airlangga.
In addition, Airlangga mentioned several other staple foods whose taxes will also be borne by the government, such as wheat flour to industrial sugar for which the tax will be paid by the government, which is 1 percent.
“Then wheat flour and industrial sugar, so each remains at 11 percent, of which 1 percent is borne by the government,” said Airlangga.
According to Airlangga, the stimulus assistance is to maintain the purchasing power of people who are in great need of these basic necessities. Airlangga also said that this material is also to help the food and beverage industry which has a big role in the Indonesian economy.
