Maruarar Optimistic Extension Of VAT Incentive DTP Can Boost The Indonesian Economy

Minister of PKP Maruarar Sirait (Photo: Theresia Agatha/VOI)

JAKARTA - Minister of Housing and Settlement Areas (PKP) Maruarar Sirait or Ara is optimistic that the extension of the Government-Borrowed Value Added Tax (PPN DTP) incentive can boost economic growth.

This is because the Indonesian housing industry has a derivative of the multiplier effect on hundreds of other industries.

"The housing industry is hundreds of affiliated industries. Starting from paint, wood, ceiling, cement sand. This will greatly drive the economy and economic growth next year," Ara said at a press conference on the Economic Stimulus Package for Welfare at the Coordinating Ministry for the Economy Office, Jakarta, Monday, December 16.

Ara said that initially he really wanted to propose an extension of the validity period of VAT DTP incentives for the housing sector for the 2025 fiscal year (TA).

Therefore, he thanked the Coordinating Minister for the Economy Airlangga Hartarto and the Minister of Finance (Menkeu) Sri Mulyani Indrawati for officially extending the 100 percent DTP VAT for houses up to IDR 5 billion.

Previously, Coordinating Minister for the Economy Airlangga Hartarto officially announced the extension of the property sector VAT incentives into the economic policy stimulus package provided by the government.

This is done as an effort to maintain purchasing power after the Value Added Tax (VAT) is implemented at 12 percent starting January 1, 2025.

"For the middle class, the government will resume VAT borne by the government for property up to Rp5 billion," said Airlangga.

The incentives will be given based on the imposition of VAT DTP of IDR 2 billion, while a tax of IDR 3 billion is paid. In his explanation, the purchase of a house with a selling price of up to IDR 5 billion for the first IDR 2 billion, with a discount scheme of 100 percent for January-June 2025.

Meanwhile, a 50 percent discount for the July-December 2025 period. This incentive is given with the aim of encouraging multiplier effects and creating large job opportunities.