Sri Mulyani Reveals 12 Percent VAT Release Reaches IDR 265.6 Trillion In 2025

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani Indrawati conveyed that tax expenditures or for Value Added Tax (VAT) incentives in 2025 are estimated at IDR 265.6 trillion.

"If we look at next year's Rp265.6 trillion for VAT exemption alone, the increase is quite sharp compared to the last two years or even the last five years. Various government programs are actually enjoyed by all levels of society," he said at a press conference on the Economic Stimulus Package for Welfare, Monday, December 16.

In addition, Sri Mulyani said, the estimated budget in 2025 will increase when compared to 2024 which is estimated to only reach Rp231 trillion.

Sri Mulyani explained, one of the focuses of incentives is the exemption of VAT, namely for basic needs such as Rice, Corn, soybeans, meat, sugar, fresh milk, nuts, poultry, and others. In addition, fishery and marine products are also exempt from VAT.

The estimated budget that was exempted for the foodstuffs sector reached IDR 77.1 trillion.

As for goods such as wheat flour, sugar for industry, and our oil VAT is still 11 percent.

Sri Mulyani explained that the budget includes basic needs such as rice, corn, soybeans, sugar, fresh milk, nuts, poultry, and others of IDR 50.5 trillion, as well as fishery and marine products of IDR 26.6 trillion.

In addition, the Government will also provide tax incentives for Micro, Small and Medium Enterprises (MSMEs), which will not collect VAT for small entrepreneurs with a turnover of no more than IDR 4.8 billion per year so that the total incentives for MSMEs reach IDR 61.2 trillion.

Then for the transportation sector which was exempted from VAT 12 percent, namely the exemption of VAT for public transportation services amounting to Rp. 23.4 trillion, a freight forward with a special tariff of Rp. 7.4 trillion, and a package delivery service of Rp. 2.6 trillion, bringing the total value of PPn that was released to Rp. 34.4 trillion.

Meanwhile, the VAT education sector is estimated at IDR 26 trillion, while for VAT it is exempted for medical health services worth IDR 4.3 trillion.

So that the total value of VAT that is exempted for education and health services reaches IDR 30.8 trillion.

Meanwhile, the VAT Financial Services sector that was released was estimated at IDR 19.1 trillion.

Meanwhile, VAT was exempted for insurance services worth IDR 8.7 trillion, so that the total VAT that was exempted for financial services and insurance reached IDR 27.9 trillion.

Furthermore, the automotive sector VAT incentive is estimated at IDR 11.4 trillion. Meanwhile, the DTP VAT Incentive for the property sector is IDR 2.1 trillion, bringing the total VAT incentives that are exempted for automotive and property to IDR 15.7 trillion.

Then, VAT was exempted from electricity, except for houses with power above 6600 VA of Rp12.1 trillion, while VAT was exempted for clean water of Rp2 trillion. So that the total for these two sectors reaches Rp14.1 trillion.

Next, other incentives will be given for free areas amounting to Rp1.6 trillion and incentives for religious services and social services worth Rp0.7 trillion so that the total incentives reach Rp4.4 trillion.