The VAT increase will be directed to support the government's strategic programs, which are funded by the state budget, he informed.
"These programs include the provision of free nutritious meals, free health check-ups, the construction of hospitals in various regions, and the examination of infectious diseases such as tuberculosis," he said in a statement issued here on Monday.
Other government strategic programs include school renovation, the development of integrated top schools, and the construction of national, regional, and village food storages, Abdullah added.
However, he underlined the importance of implementing risk mitigation measures against the impact of the VAT increase, especially for lower- and middle-class households.
He proposed increasing the budget allocation for inclusive social protection programs, which will not only cover poor households, but also families in the vulnerable or near-poor groups.
The social protection programs must be carried out on time and on target, he added.
Abdullah also highlighted the importance of providing subsidies for public transportation services in urban areas.
In addition, he advised the government to provide housing subsidies for the lower middle class, for instance, for small houses and flats.
"Subsidies for fuel, liquefied petroleum gas (LPG), and electricity for poor households need to be expanded to include middle-class households," he said.
He added that online motorcycle taxi drivers also need to get subsidized fuel.
"If possible, the subsidy needs to be expanded to cover the lower-middle class group," he explained.
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Translator: Bayu S, Kenzu
Editor: Rahmad Nasution
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