Consumer & Retail Banking
Consumer & Retail Banking
Article
2025-01-07

Smart Financial Management Despite 12% VAT Cancellation

The proposal to increase VAT to 12% has sparked much discussion, drawing both support and criticism. According to Tempo, Minister of Finance Sri Mulyani Indrawati announced that the Value-Added Tax (VAT) rate for certain goods and services will remain at 11%. The 12% VAT rate will only apply to items currently categorized under Luxury Goods Sales Tax (PPNBM).

Although the planned VAT increase to 12%, as outlined in Article 7 of the Tax Regulation Harmonization Law (UU HPP), has been canceled, financial preparedness remains essential.

Whether or not the VAT increase takes effect, adopting smart financial management strategies is always a good idea to navigate future economic uncertainties. Here are some practical steps you can take:

 

1. Plan Your Monthly Spending Wisely

 

In times of economic uncertainty, carefully planning your monthly budget is more important than ever. This approach helps you manage your expenses while staying within your financial means.

  • Track your regular expenses: Identify essential needs such as groceries, utility bills, and transportation.
  • Allocate funds wisely: Distinguish between primary and secondary needs, prioritizing essential spending.
  • Take advantage of promotions and discounts: Look for deals that can help reduce your expenses.

With thoughtful planning, you can stay in control of your budget without sacrificing key necessities.

 

2. Avoid Rushing to Buy New Items

 

Sometimes, the urge to replace items comes from boredom rather than necessity. However, replacing functional items can strain your finances without adding real value.

Tips to Avoid Impulsive Purchases:

  • Make a needs list: Before purchasing, ask yourself if the item is truly necessary or just a desire.
  • Allow time for consideration: Postpone non-urgent purchases for at least a few days.
  • Choose quality over quantity: When buying, ensure the item is durable and offers long-term value.

Making thoughtful decisions will help you avoid financial regrets in the future.

 

3. Build an Emergency Fund and Start Investing

 

After organizing your budget and controlling your spending, the next step is to establish an emergency fund and explore investment opportunities to maintain financial stability.

How to Prepare an Emergency Fund and Investments:

  • Set up an emergency fund: Save at least 3–6 months’ worth of your monthly expenses for unexpected needs. Consider safe options like savings plans or dedicated emergency funds. You can safely store your emergency fund in a Dana Impian account or an iB Hijrah Rencana savings account.
  • Start investing: Explore investment instruments such as mutual funds or gold to counter inflation.
  • Diversify your portfolio: Spread your investments across different instruments to minimize risks.

These steps can make your finances more resilient to challenges, including rising prices of goods and services.

The government’s decision not to raise the VAT rate to 12% provides some relief, but it doesn’t mean we can be complacent in managing our finances. These three strategies not only help you handle potential financial pressures caused by policy changes but also lay a stronger financial foundation for the future. By being proactive, we can remain optimistic and resilient in navigating the ever-changing economic landscape.
 

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