Inp.polri.go.id - Jakarta. National Economic Council (DEN) Chairman Luhut Binsar Pandjaitan said that the planned increase in Value Added Tax (VAT) to 12%, originally set for 1 January 2025, is likely to be delayed.
“It’s almost certain to be postponed,” he said on Wednesday (27/11/2024), as quoted by antaranews.com.
Luhut explained that the delay is aimed at providing economic relief to lower-income groups before the higher tax rate is implemented.
“Before raising VAT, we need to first provide support for those struggling economically,” he said.
The relief package, according to Luhut, will focus on energy subsidies, particularly for electricity, rather than direct cash assistance.
“The support will go towards electricity subsidies to ensure proper use,” he said, saying thatt the government has allocated funds for this program through the state budget and is finalizing the distribution process.
Addressing public criticism on social media, Luhut attributed the concerns to a lack of understanding about the tax structure.
Finance Minister Sri Mulyani previously said that the VAT hike remains mandated by law and will proceed unless officially postponed.
(mg/inp/pr/nm)