Economist: Tax stimulus and ticket discounts to maintain consumer purchasing power

JAKARTA (ANTARA) — Trimegah Securities Indonesia Chief Economist Fakhrul Fulvian said the government’s stimulus measures, including reducing final income tax (PPh Final) to 1.5% and transport discounts, are positive steps to maintain consumer purchasing power and short-term economic activity.

“Generally, I appreciate the government’s move. In the current uncertain global economic climate, stimulus measures to support household consumption are necessary. The reduction in final income tax is also a positive signal that the government is paying attention to the creative economy sector and professions often overlooked in economic policy discussions,” Fakhrul told ANTARA in Jakarta on Friday.

He added that transport discounts could boost public mobility, positively impacting tourism, hospitality, restaurants, retail, and small and medium enterprises (SMEs) reliant on domestic travel.

“When travel costs decrease, people tend to travel more and spend in various regions, creating a beneficial multiplier effect on local economies, especially during school holidays and year-end periods,” he explained.

However, Fakhrul cautioned that such consumption stimulus measures are inherently temporary.

“We must view this policy proportionally. While the impact exists, it is typically temporary. After the stimulus period ends, economic activity usually reverts to its normal trend. Therefore, consumption stimulus cannot be the sole engine of economic growth,” he said.

He further stressed that national economic success should not be measured solely by temporary consumption increases, but by the economy’s ability to create sustainable jobs.

“The key issue isn’t how many people take trains, planes, or buses during holidays. More important is whether businesses feel confident enough to expand, invest, and create new jobs,” Fakhrul said.

He noted that Indonesia’s biggest economic challenge is ensuring growth generates quality, sustainable jobs.

“In the end, people don’t become prosperous from a few weeks of ticket discounts. Prosperity comes from good jobs, rising incomes, and confidence in a better future,” he added.

Fakhrul added that consumption stimulus can complement growth momentum, but the government must prioritise job creation.

“Therefore, I view this stimulus as positive and worthy of appreciation. However, the bigger agenda remains maintaining an investment-friendly climate, policy certainty, strengthening industry, and creating more jobs,” he said.

“Consumption can help the economy move faster, but jobs are the foundation for sustainable economic growth in Indonesia,” he added.