Indonesia on Monday announced economic measures to soften the blow of an increase in the value-added tax rate, including electricity tariff cuts, incentives for labour-intensive industries, and VAT exemption on some property sales.

The government will concurrently implement a comprehensive economic stimulus package to mitigate the potential impact of the VAT increase to 12%.

Indonesia will proceed with its value-added tax hike in 2025, while offering a raft of incentives to mitigate the impact on consumption and economic growth.

The Indonesian government has unveiled a series of economic stimulus packages totaling Rp 827 trillion ($51.65 billion) for 2025

Indonesia will on Monday announce an economic policy package, including its decision on the value-added tax rate, its senior economic minister said after a meeting with President Prabowo Subianto. The government has previously said Indonesia would increase the VAT rate to 12% from the current 11% in January 2025,