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 will have a positive impact on the country’s economy.
Finance Minister Sri Mulyani Indrawati said the government will bear the 1 percent increase in value added tax (VAT) 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 for goods such as wheat flour, sugar for industry, and MinyaKita that the VAT remains at 11 percent. This means that from the increase to 12 percent, 1 percent is paid by the Government,” explained Sri Mulyani.
The three commodities are considered very necessary for the general public, so the government has decided to implement government-borne VAT (DTP) on the upcoming VAT rate increase. Sri Mulyani stated that the decision is the government’s commitment to preparing fiscal instruments that favor the community.
“We understand the views of various parties. We also see data on consumption of neighboring homes that remain stable. Then inflation has decreased and is relatively low at 1.5 (percent),” he explained.
Meanwhile, Coordinating Minister for Economic Affairs, Airlangga Hartarto said the government will cover the needs of other food items subject to 12 percent VAT, namely 1 percent which is designed to provide direct relief to groups of people who are included in the low-income category.
“For 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 at 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, the taxes for which will be paid by the government, which is 1 percent.
“Then wheat flour and industrial sugar, so each remains at 11 percent, 1 percent of which 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.