Tax Incentive Strategy Boosts Jakarta's Economic Growth
Reported by Dessy Suciati | Translated by
Statistics Indonesia (BPS) Jakarta has officially released data showing the city's economic growth reached 5.21 percent year on year (y/y) in 2025. The figure marks a positive performance, as it exceeded the national average economic growth rate of 5.11 percent.
"These initiatives are meant to energize shopping centers and MSMEs,"
Jakarta Governor Pramono Anung welcomed the result, particularly the strong performance recorded in the fourth quarter of 2025, which reached 5.71 percent.
"As released by BPS on February 5, Jakarta's year-on-year economic growth in 2025 stood at 5.21 percent, higher than the national average of 5.11 percent," he stated at Jakarta City Hall on Friday (2/6).
City Exempts Land and Building Tax for Certain House CategoriesAccording to Pramono, the economic growth was partly driven by government policies aimed at boosting household consumption during the Christmas and New Year holiday period.
The Jakarta Provincial Government rolled out various tax incentives and provided space for hospitality sector, shopping centers, and micro, small, and medium enterprises (MSMEs) to expand. These policies generated transactions worth Rp15.25 trillion during the Christmas and New Year holiday.
"As a result, this figure significantly contributed to fourth-quarter growth, which reached 5.71 percent," Pramono pointed out.
He added that similar strategies would be implemented to capitalize on other major moments, such as Lunar New Year, Ramadan, and Eid al-Fitr. The city government plans to hold various activities, including discount campaigns and additional tax incentives, to keep purchasing power competitive.
Through these initiatives, Pramono encouraged shopping centers and MSMEs to continue growing.
"These initiatives are meant to energize shopping centers and MSMEs, allowing people to enjoy more competitive prices. We are providing tax incentives, discount campaigns, and similar programs," he explained.
To further drive Jakarta's economy, Pramono stressed the importance of innovation and creative financing supported by the Jakarta government's policies. Without such strategies, he said, Jakarta's economic growth would likely mirror the national average.
"With the figures we have just received, hopefully this will continue to be a positive development for Jakarta," he stated.
Regarding the decline in the Gini ratio, Pramono explained that addressing income inequality remains one of his key priorities.
Despite a reduction in Jakarta's regional budget (APBD) this year, he said allocations for education and social welfare programs, such as KJP, KJMU, and diploma clearance programs, remain unaffected.
"For Jakarta, it is extremely important to reduce the gini ratio," he emphasized.
Even so, Pramono admitted he was not yet satisfied with the progress, noting that the Jakarta government has allocated up to Rp2 trillion to address inequality.
"Hopefully, next year's results will be better," he said.
He added that the Jakarta Government has prepared several strategies to further lower the Gini ratio, including improving infrastructure and expanding access to education for underprivileged residents.
