Indonesia to Implement VAT Exemption for Sumatra Disaster Relief Donations

Policy Aimed at Supporting Disaster Recovery Efforts

The Indonesian government has announced plans to exempt Value-Added Tax (VAT) on donations made for disaster relief efforts in Sumatra during 2026. Finance Minister Purbaya Yudhi Sadewa revealed that the government will cover the VAT on these donations through a VAT Exemption (PPN Ditanggung Pemerintah, DTP) policy. This initiative aims to encourage more contributions to support recovery efforts in regions affected by natural disasters.

Regulatory Framework Under Development

The exemption is currently being formalized through a draft Minister of Finance Regulation (PMK), which is under discussion. Once implemented, this policy will provide significant support to disaster relief efforts by reducing the financial burden on donors. The government's decision reflects its commitment to facilitating humanitarian assistance during times of crisis.

Expected Impact on Disaster Relief

By exempting VAT on donations, the government expects to boost the overall amount of aid received for disaster-stricken areas. This policy is seen as a proactive measure to encourage both individual and corporate donations, ultimately benefiting those affected by natural disasters in Sumatra.