The Ministry of Finance has announced plans to extend the 100% Government-Borne Value Added Tax (PPN DTP) incentive for home purchases until the end of the year.  

“The extension of the PPN DTP for housing will be finalized within the next one to two days,” said Yustinus Prastowo, Special Staff to the Minister of Finance for Strategic Communications, during a press conference at the ministry's office in Jakarta on Wednesday, September 11. 

The previous regulation under the Minister of Finance (PMK) concerning PPN DTP expired in June. The government aims to extend this incentive to provide support to the public, particularly the middle class, which has seen a decline in numbers. 

Coordinating Minister for Economic Affairs Airlangga Hartarto also noted that the Central Statistics Agency (BPS) has conducted a survey highlighting this drop in the middle class. The survey shows that housing remains one of the largest expenditures for the middle class, underscoring the importance of extending the PPN DTP incentive.  

“We currently have several incentives, including PPN DTP, property PPN, and the Housing Financing Liquidity Facility (FLPP),” Airlangga explained. 

According to a recent National Socioeconomic Survey (Susenas) by BPS conducted in March, the middle-class population has decreased from 57.33 million in 2019 to 47.85 million this year. 

The survey also provides data on the current spending patterns of the middle class, with food comprising the largest share at 41.67%, followed by housing at 28.52%, and goods and services at 6.48%. 

BPS Acting Head Amalia Adininggar Widyasanti emphasized the need to strengthen purchasing power across all economic groups, not just the poor but also the middle class and those on the cusp of joining it.  

“If both the middle class and those aspiring to join it are strong, overall purchasing power will be more resilient,” she said. 

The middle class and those aspiring to join it represent 66.35% of the population, contributing 81.49% of total consumption expenditures. 

Original article here

This article is published in partnership with Katadata