JAKARTA — The government has decided to adjust the Value Added Tax (VAT) to 12 percent starting January 1, 2025 as a strategic step to maintain fiscal stability and support economic development.
This policy is implemented based on Law Number 7 of 2021 concerning Harmonization of Tax Regulations (HPP Law), which mandates the implementation of the new rates.
Minister of Finance, Sri Mulyani Indrawati, explained that this tax policy was designed with the principles of justice and mutual cooperation in mind.
He emphasized that basic necessities such as food, education services, and health services remain exempt from VAT.
“Justice is when groups in society are able to pay taxes according to their obligations, while less fortunate people are protected and even given assistance,” he explained.
In addition, the government will bear the 1 percent increase in VAT for main commodities such as wheat flour, industrial sugar, and people’s cooking oil to protect people’s purchasing power.
Socialization will continue to be carried out so that the public understands the benefits of this policy as part of a broader economic stimulus.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that this policy was not made carelessly, but rather the implementation of the mandate of the HPP Law.
The government has also prepared various incentives, including food aid for 16 million families and a 50 percent electricity tariff subsidy during January-February 2025.
“This policy is designed to protect small communities while supporting sustainable development,” he said.
PBNU General Chairman, Yahya Cholil Staquf, assessed the importance of the public understanding the context of this policy as a whole.
According to him, a complete explanation will help the public understand the urgency and benefits of the policy.
“The public needs to know the reasons and benefits of this policy so that they do not just make partial demands,” he said.
Through this carefully designed policy, the government is optimistic that it can maintain people’s purchasing power, support economic sustainability, and realize social justice.
The VAT adjustment is expected to strengthen the national economy and provide better protection to the community, while maintaining the sustainability of the State Budget (APBN). [*]
