Minister of Trade, Budi Santoso, announced that the government will provide a 1% Value Added Tax (VAT) incentive for three basic food commodities: MINYAKITA cooking oil, wheat flour, and industrial sugar. This incentive is part of the government's economic policy package aimed at supporting the welfare of the public, particularly those with lower incomes. The incentive is a follow-up to the implementation of a 12% VAT, set to take effect on January 1, 2025. The announcement was made during a press conference titled "Economic Policy Package for Welfare" held at the Office of the Coordinating Ministry for Economic Affairs in Jakarta. Minister Budi Santoso emphasized that the VAT incentive for these three essential commodities is crucial to maintaining economic growth and purchasing power for low-income communities.
Minister Budi Santoso further explained that MINYAKITA is a type of cooking oil produced through the Domestic Market Obligation (DMO) program, specifically intended for low-income households. With the VAT incentive, he assured that there would be no price increase for the public, despite the 12% VAT being implemented. For wheat flour, which is widely used by the general population, particularly low-income households, the incentive is necessary to stabilize consumer prices. As for industrial sugar, Budi Santoso noted its importance as a key raw material for the food and beverage industry. The VAT incentive is essential to ensure the continued operation of these industries. The Ministry of Trade will also conduct socialization efforts with business players to prevent any confusion among stakeholders. During the press conference, Minister of Finance Sri Mulyani Indrawati highlighted that the VAT policy prioritizes public welfare, with the government absorbing the additional 1% tax burden for essential goods like MINYAKITA, wheat flour, and industrial sugar, ensuring no price changes for consumers. The application of the 12% VAT also aligns with the principles of justice and mutual cooperation, with the wealthy bearing more of the tax burden.
