Airlangga: Tax Incentives Help Move the Middle Class Up the Ladder

JAKARTA, DDTCNews – Coordinating Minister for Economic Affairs, Airlangga Hartarto, is optimistic that the various tax incentives rolled out by the government will boost purchasing power whilst strengthening the economic capacity of middle-class households.

According to Airlangga, the incentives reduce the public's tax burden, thereby rendering greater room for consumption or asset accumulation. The incentives in question include government-borne (ditanggung pemerintah/DTP in Indonesian) Article 21 Income Tax, government-borne value added tax (VAT) on house purchases and government-borne VAT on airline tickets.

"One way [to help the middle class move up] is through [incentives for] house purchases, asset accumulation. This is to increase the economic capacity of the public. There is also government-borne VAT and income tax, which we are still running," he said, as quoted on Monday (13/7/2026).

In addition to tax incentives, the government also grants stimulus during the mid-year school holiday period, such as discounts on transport tickets and government-borne VAT on the purchase of economy-class airline tickets for domestic flights.

Through these various stimulus measures, the government hopes to render travel costs more affordable for the public, thereby driving household consumption, boosting tourism activity and stimulating the domestic economy.

"We are also boosting purchasing power, and that includes programmes during this holiday period. We are also maintaining the price of pertalite [fuel] and biodiesel at subsidised prices," said Airlangga.

In 2026, the government has once again introduced a number of tax incentives to support public consumption and certain sectors.

First, the government grants the government-borne Article 21 Income Tax facility throughout January–December 2026, as regulated under MoF Reg. 105/2025. This incentive is granted to employees working at companies that satisfy certain criteria, including those in the footwear, textiles and garments, furniture, leather and leather goods and tourism sectors.

Second, the government grants the government-borne VAT facility for transfers of landed houses and flats in the 2026 fiscal year, pursuant to MoF Reg. 90/2025. These facilities may be utilised by any individual for the purchase of one residential unit.

In addition, the government provides a government-borne VAT on airline ticket purchases, as regulated under MoF Reg. 43/2026. The incentive is granted at 100% of the VAT due on the base fare and fuel surcharge.

However, the government-borne VAT facility for airline tickets applies only to tickets purchased between 22 June and 5 July 2026, for flights departing between 24 June and 5 July 2026. Tickets purchased for flights after 5 July 2026 are not eligible for the facility. (dik)