The Ministry Of Finance Will Issue Regulations On Free VAT For Homes This Week

Illustration. (Photo: Doc. Antara)

JAKARTA - The Ministry of Finance (Kemenkeu) will issue a Minister of Finance Regulation (PMK) regarding the extension of the Government-Borrowed Value Added Tax (PPN DTP) incentive for housing purchases this week.

Special Staff to the Minister of Finance for Strategic Communication Yustinus Prastowo said the regulation would be completed in the next one to two days.

"It's just a decision. We are currently in the process of joint determination," Prastowo told the media in Jakarta, quoted from Antara, Thursday, September 12.

Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto said the government agreed to increase incentives from the previous 50 percent for the second semester of 2024, to 100 percent until December 2024. This incentive is mostly directed at the middle class because it targets commercial houses.

He defines the middle class as a society with a consumption pattern where the largest expenditure is usually in terms of the sector for food and beverages, followed by housing, health, education, to entertainment or the service sector.

Currently, the housing sector is one of the second largest expenditures for the middle class so that government policies in this sector become important.

In addition to DTP VAT incentives, the Government has also increased the quota for Housing Financing Liquidity Facilities (FLPP) from 166,000 units to 200 thousand units starting September 1, 2024.

Both policies have been approved by President Joko Widodo (Jokowi). Meanwhile, Minister of Public Works and Public Housing (PUPR) Basuki Hadimuljono previously stated that the quota for subsidized houses for the FLPP scheme in 2025 would adjust to Prabowo Subianto's presidential program.

On a separate occasion, Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance Febrio Kacaribu said the budget for the two programs had been prepared.