The VAT increase is applicable as of 1 January 2025. The previous VAT rate of 11 percent is no longer applicable and has been replaced with the latest VAT rate of 12 percent.
What Goods and Services Are Affected by the Latest 12 Percent VAT?
Not all goods and services are affected by the 12 percent VAT increase. However, many goods and services are affected by the new VAT rate, namely those that fall into the luxury category.
Goods and services not affected by the 12 percent VAT
People's necessities such as rice, eggs, milk, meat and vegetables are free from the latest VAT rate. Likewise, services such as medical health and education (source: Republic of Indonesia Cabinet Secretariat).
Goods and services affected by the 12 percent VAT
Goods and services that experience price increases due to the 12 percent VAT increase include luxury residences, airplanes, hot air balloons and luxury cruise ships are also affected by the 12 percent VAT increase (source: Kompas).
When saving money to buy goods subject to 12 percent VAT, don't forget to also allocate a budget for the tax
If previously the budget you set aside was less, now you have to allocate more budget because of the increase in VAT rate. In other words, make sure you also save money to pay the higher tax rate.
12 Percent VAT Increase for Luxury Goods, Does It Have an Impact on the General Public?
Even though the VAT rate increase is only for luxury goods and services, the public still feels a significant impact. Prices for various necessities have already increased or experienced price spikes in anticipation of the 12 percent VAT increase. The expected inflation has already occurred (source: Koran Jakarta).
Being proactive in managing and spending money to deal with price spikes is an important thing to do, especially if the prices of goods are not adjusted to their previous prices.
What strategies and wise steps can be taken to deal with rising prices of goods and services?
How to Deal with Rising Prices of Goods and Services
Below are various ways and strategies that you can apply in your daily life to get around the latest VAT increase.
1. Prioritize important needs and reduce unnecessary spending
Get to know your spending habits so far. Is a lot of money spent on consumptive needs? To make it easier, you can try to remember and make a list of past monthly expenses.
If a lot of money is spent on non-essential needs, whether in the form of goods or services, you need to reconsider your budget allocation. Focus first on priority or primary needs and set aside a budget for the most important expenses.
You can start reducing expenses that are consumptive, such as entertainment and subscriptions. Please remember, discipline and self-control also play an important role in allocating and using the budget.
Continue reading this article to find out easy and practical ways to manage your budget for every need in the Jago application.
2. For durable products that you need for a long term, consider purchasing in bulk
Another strategy that can be done is to save money. One way is to buy products that are long-lasting and often needed or used daily directly in large quantities. In general, if the price is calculated, products with large packages or sizes will be cheaper than buying them in smaller packages or sizes.
Purchasing products individually or in small sizes is likely to have a greater value increase because the selling price of the products is more expensive.
3. Earn extra money from your savings
You can maximize your savings, which will not be used to meet various needs, for example by moving it to savings products or investment instruments that can provide greater returns.
The additional income earned will be very helpful when you have to spend more money when buying products that increase in price.
Continue reading this article to find out easy and convenient ways to save and invest with Bank Jago and the ecosystem.
Managing Money Easily and Practically in the Jago Application
By having a Jago/Jago Syariah account, you can enjoy the ease and practicality of managing your finances the way you want/according to your principles in the Jago application.
1. The Jago/Jago Syariah Pocket feature for budgeting expenses and savings
You can create dozens of Jago/Jago Sharia Pockets to manage various needs. Start with priority needs first. How many priority needs must be met? Create one Pocket for one need.
Next, you can budget each Pocket automatically or manually, the way you want.
You can read the benefits of automatic budgeting and how to do it in this article. Meanwhile, if you choose manual budgeting, all you need to do is move money between Pockets.
2. Emergency funds can be saved in the Saving Pocket or Jago Term Deposit/Sharia Deposit
Under any circumstances, it is always important to have an emergency fund that can be used at any time when faced with urgent or unexpected circumstances. To have a calmer mind amidst the rising prices of goods and services, you need to prepare an emergency fund.
In the Jago application, you can save your emergency funds in a Saving Pocket or deposit. Conventional Jago users can open Jago Term Deposits, while Jago Syariah users can open Sharia Deposits. No need to worry about saving emergency funds in deposits as you can withdraw them at any time without penalty via the Jago application.
3. Various investment options: Jago Term Deposit/Sharia Deposit, mutual funds and stocks in the Bank Jago ecosystem
To get more returns from your existing savings, you can invest in deposits.
The Jago Term Deposit’s interest is greater than the Saving Pocket’s for conventional Jago users.
What about Jago Syariah users? By investing in Sharia Deposits, you can get profit sharing according to Mudharabah Muthlaqah akad. The Jago Syariah Saving Pocket uses Wadiah Yad Dhamanah akad without interest.
Apart from deposits, both conventional Jago and Jago Syariah users can invest in mutual funds and stocks through the Bibit and Stockbit applications.
Bibit users who have upgraded to Bibit Plus using Jago RDN/Jago Syariah RDN can now access more investment options, including FR bonds and stocks.
