During a press conference on economic policy packages in Jakarta on Monday, she explained that the discount is provided to subscribers with electricity capacity of 2,200 VA or below.
The policy will affect 81.4 million households, or 97 percent of the total customers of the state-run electricity company, PLN.
The total budget for the electricity discount reaches Rp12.1 trillion (around US$756.15 million).
PLN CEO Darmawan Prasodjo expressed appreciation for the government's discount.
In addition, PLN is in favor of the VAT imposed on 400,000 customers with electricity capacity of 6,600 VA or above.
"VAT for electricity rates is imposed only on our richest households or customers from the deciles in our customer structure," Prasodjo affirmed.
He noted that PLN is ready to implement the policy by making adjustments for customers eligible for the 50 percent discount.
On Monday, the government announced that the increase in the VAT rate from 11 percent to 12 percent will take effect on January 1, 2025.
Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the 12 percent VAT rate aligns with Law Number 7 of 2021 on Harmonization of Tax Regulations.
Nevertheless, the government will continue providing VAT exemptions for strategic goods and services.
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Translator: Putu Indah, Raka Adji
Editor: Anton Santoso
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