Indonesia Ministry of Finance announces Rp632 trillion tax incentive plan

Finance Minister Suahasil Nazara announced that the Indonesian government plans to provide Rp632 trillion in tax incentives in 2027, equivalent to 2.26% of the nation's GDP. These measures, which include tax holidays and VAT facilities, aim to support households, MSMEs, and various business sectors to maintain purchasing power and ensure economic competitiveness.

In a separate fiscal matter, Suahasil Nazara advised the Jakarta Provincial Government to carefully assess interest rate risks before issuing regional bonds valued between Rp3.5 trillion and Rp5.2 trillion. The bonds are intended to fund public infrastructure projects, including LRT extensions and hospital construction.

Meanwhile, the National Awakening Party (PKB) has called for a review of the 11% VAT applied to sanitary pads. Party representative Nadya Alfi Roihana argued that sanitary pads are a primary biological necessity rather than a luxury good, noting that the tax could disproportionately burden women in rural areas.