Appreciation of the Government’s Decision to Implement the Economic Stimulus Package
By: Reenee WA. (Former Journalist/Social Economy Observer)
The government’s policy to cancel the increase in VAT from 11% to 12% and only apply it to luxury goods and services deserves appreciation. The government is committed to continuing to implement the economic stimulus package. This policy has a positive impact amidst the economic pressures faced by the Indonesian people.
One of the President’s policies that is considered to support economic recovery is not to increase Value Added Tax (VAT) widely. In accordance with the mandate of Law Number 7 of 2021, VAT should increase by 1% in 2025. However, this policy only applies to the wealthy, while other groups are balanced with an economic stimulus package of IDR 265 trillion.
The government of President Prabowo Subianto and Vice President Gibran Rakabuming Raka launched an economic stimulus package aimed at encouraging consumption, investment, and production activities. This stimulus is expected to have a positive impact on the lower middle class.
This decision also shows the government’s sensitivity in responding to the voice of the people and understanding their economic conditions. Various elements of society, from public figures to organizational leaders, welcomed this policy which is considered in accordance with the public interest. The cancellation of the planned VAT increase is a strategic policy that reflects the government’s seriousness in considering the aspirations and welfare of the people, while also showing their commitment to the stability of the community’s economy.
University of Indonesia economist, Fithra Faisal Hastiadi, explained that the government is strengthening the social assistance (bansos) program and consumption stimulus. Around 16 million beneficiaries will receive assistance in the form of food, clothing, and rice through this program. On the other hand, the government is also focusing on strengthening the production sector by providing labor-intensive incentives so that manufacturing productivity can recover.
To support consumption and production, the VAT increase will only be focused on the wealthy, as regulated in PMK 131 of 2024. In addition, the government has also allocated an economic stimulus of IDR 265 trillion in 2025. If this stimulus is used effectively, there is the potential for additional economic growth of up to 0.5-1%.
These steps demonstrate the government’s commitment to maintaining national economic stability amidst global economic dynamics.
In addition, the government also intervened in the Luxury Goods Sales Tax (PPnBM). However, Fithra also emphasized the importance of selective budget management where the government must avoid budget leaks and make savings to reduce potential deficits. Refocusing the budget on more efficient products can help increase short-term economic growth. Fithra also reminded that the dynamic global economic climate can be a significant challenge to the government’s growth targets.
This economic stimulus policy reflects the government’s real steps in facing global economic challenges, while building optimism for more inclusive and sustainable growth. From an economic perspective, setting higher VAT only for luxury goods and services is considered a strategic step in maintaining people’s purchasing power.
The government has shown its commitment to creating fairer and more equitable policies. This is a positive signal to the public that the government is always open to criticism and suggestions from various elements. This is in line with the demands of the public who increasingly want transparency and accountability in government decision-making.
The public certainly expects the government to continue to be committed to listening to the voice of the people and making policies that favor the interests of all Indonesian people. Public appreciation for the cancellation of the VAT increase can be an encouragement for the government to continue to innovate and create better policies in the future.
The government’s decision, while continuing to run the economic stimulus program, paves the way for a better transformation in the future. Active participation and public voice in the policy-making process are essential to realizing shared prosperity. Collective support for the government will help realize policies that prioritize the interests of the people, creating a prosperous and just society. Every subsequent government step must always prioritize economic improvement, social equality, and improving the standard of living of all levels of society.
