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PLN expects Rp 10t in losses from 50% electricity discount
The state electricity company expects to incur earning losses of over $600 million from the government's 50 percent discount for certain residential consumers to soften the impact of the VAT hike in January.
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A worker from state electricity company PLN performs routine maintenance on Dec. 27, 2023, at a transmission tower in Palu, Central Sulawesi. (Antara/Basri Marzuki)
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tate electricity firm PLN estimates potential revenue losses of up to Rp 10 trillion (US$616.6 million) next year from the government’s decision to offer a 50 percent discount for the electricity bills of certain residential subscribers in the first two months of 2025.
The discount scheme is part of a stimulus package to soften the impact of a value-added tax (VAT) rate hike that starts in January, and applies to capacity subscriptions of up to 2,200 volt-amperes (VA) for small to medium houses.
In a statement on Dec. 17, PLN said the scheme would benefit an estimated 81.4 million households nationwide, which made up 35 percent of national electricity consumption.
It is similar to a three-month electricity stimulus the government launched during the COVID-19 pandemic in 2020, which included a electricity bill waiver for residential customers in the 450 VA category, the lowest of six subscription categories, and a 50 percent discount for residential customers in the second-lowest category of 900 VA.
On Friday in Depok, West Java, PLN finance director Sinthya Roesly said the company expected the discount scheme to result in “a decrease in income from customers of Rp 5 trillion per month in January and February”, as quoted by Kontan.co.id.
Read also: Govt proceeds with VAT hike but rolls out incentives to soften blow
Sinthya underlined that PLN was ready to implement the scheme, regardless of the projected loss of earnings, adding that the company would work with relevant stakeholders to mitigate impacts from the projected loss. She also made assurances that PLN’s financial condition would remain stable.
