Jakarta, IndonesiaSentimnel.com — The Indonesian government is reinstating a 100% Value-Added Tax (VAT) discount on home purchases, effective from September 1, 2024, through December 2024. This incentive, known as VAT borne by the government (VAT DTP), aims to stimulate the housing sector.
Coordinating Minister for Economic Affairs, Airlangga Hartarto announced the decision, which was approved by President Joko Widodo during a recent meeting.
“The government has introduced a VAT DTP incentive for the housing sector, providing a 100% VAT discount until December 2024. The Ministry of Finance will issue the necessary regulations,” Airlangga stated after an economic dialogue titled “The Role and Potential of the Middle Class Towards a Golden Indonesia 2045” at the Coordinating Ministry for Economic Affairs in Jakarta on Tuesday, August 27, 2024.
In addition to the VAT discount, the government is increasing the quota for subsidized housing loans under the Housing Financing Liquidity Facility (FLPP) from 166,000 units to 200,000 units.
“Both of these policies will take effect on September 1,” Airlangga explained.
He emphasized that these measures aim to boost the purchasing power of the middle class and support the construction sector, which has a significant multiplier effect on the economy.
Airlangga also highlighted the importance of providing incentives for the housing sector, noting that housing is the second-largest expenditure for the middle class. Given the strategic role of the middle class in driving economic growth, the government is focused on maintaining a stable and robust economy.
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To support the middle class, the government has introduced various programs, including social protection schemes, tax incentives, job training programs, unemployment benefits, and subsidized health insurance.
Earlier this year, the government offered a 100% VAT DTP incentive for home purchases until June 2024, after which it was reduced to 50%. This policy was outlined in Ministry of Finance Regulation No. 7 of 2024 concerning VAT on the Delivery of Landed Houses and Residential Units Covered by the Government for the 2024 Fiscal Year.
(Ray)
