The Government Officially Extends The DTP VAT Incentive By 100 Percent Until The End Of 2024

JAKARTA - The government has decided to extend the provision of value added tax incentives (VAT) borne by the Government (DTP) by 100 percent for the housing sector until December 2024.

Coordinating Minister for Economic Affairs Airlangga Hartarto said President Joko Widodo (Jokowi) gave permission to extend the provision of value added tax incentives (VAT) borne by the Government (DTP) by 100 percent for the housing sector until December 2024.

"With the approval of the President (Jokowi) in the last meeting, the government has issued a DTP VAT tax incentive policy for the housing sector, where the VAT DTP incentive will be given 100 percent of this until December 2024," Airlangga said at a press conference in Jakarta Tuesday, August 27.

Airlangga explained that the technical regulations governing this would be contained in the Minister of Finance Regulation (PMK) and that the Minister of Finance Sri Mulyani Indrawati was currently preparing.

"Where the PMK will be prepared by the Minister of Finance," he explained.

Airlangga conveyed that the extension of the VAT DTP incentive was 100 percent for the housing sector in maintaining middle class purchasing power considering that the middle class was driving the economy.

In addition, Airlangga explained that the government has also encouraged the addition of a quota of housing financing liquidity facilities (FLPP) to Low-Income Communities (MBR) from the original target of 166,000 units, now it has been increased to 200,000 units.

"The government also encourages FLPP, where for low income communities, FLPP is from the original target of 166,000 units, increased to 200,000 units.

According to Airlangga, the housing sector is one of the government's priorities because it is one of the second largest expenditures after food and drinks for the middle class.

Therefore, Airlangga hopes that this policy is expected to encourage the ability of the middle class to encourage the consumption sector.

"We know that the construction and housing sectors have a high effect of multipliers," he explained.

As previously known, the government has issued regulations for providing government-borne value added tax incentives (PPN DTP) for the purchase of houses of IDR 2 billion to IDR 5 billion in 2024.

Previously, for the submission from July 1 to December 31, 2024, VAT DTP was given 50 percent of VAT owed from the basis of tax imposition (DPP) to Rp2 billion with a maximum selling price of Rp5 billion.