Household Consumption Pattern Changes Due to VAT Rate Increase A Case Study in South Tangerang

Abstract

This study aims to evaluate the effects of the Value-Added Tax (VAT) rate increase on changes in household consumption patterns in South Tangerang City. The VAT rate increase, implemented as part of the government’s strategy to boost state revenue, has the potential to influence both purchasing power and consumer preferences. This research collected primary data through household surveys and interviews with selected households in the region. The analysis reveals that the VAT rate increase significantly reduces the consumption of secondary and tertiary goods, while essential goods consumption remains relatively stable. These findings provide insight into public response to tax policy changes and their impact on consumption structure. In conclusion, the VAT rate increase policy requires careful review to maintain a balance between state revenue growth and public purchasing power.