The disasters that struck Aceh, North Sumatra, and West Sumatra toward the end of this year have caused deep suffering for thousands of affected residents. The impacts include rising casualties, destroyed homes, and the loss of livelihoods.

Following directives from President Prabowo Subianto, Finance Minister Purbaya Yudhi Sadewa has prepared a series of policies aimed at easing the burden on communities in the affected regions, ranging from tax relief to more flexible regional transfer allocations.

One of the measures involves easing Regional Transfers (TKD). Purbaya confirmed that transfer funds allocated to local governments in Aceh, North Sumatra, and West Sumatra will not be subject to budget cuts in 2026. This decision is intended to support post-disaster recovery efforts, including the rehabilitation and reconstruction of damaged infrastructure.

In addition, the government has introduced incentives in the form of infrastructure debt relief for disaster-affected regions. Purbaya explained that loans taken by local governments from PT Sarana Multi Infrastruktur (SMI) for infrastructure projects such as roads and bridges that were damaged or destroyed by the disaster will be written off.

He emphasized that the debt cancellation will be implemented selectively, based on the extent of damage in each region. Projects that are completely destroyed will be fully canceled, while partially damaged infrastructure will be reviewed on a case-by-case basis.

On the taxation front, the government has also eliminated tax obligations for victims of floods and landslides. According to the Directorate General of Economic and Fiscal Strategy at the Ministry of Finance, taxpayers who lose their source of income due to disasters are no longer required to pay taxes.

This policy aligns with Ministry of Finance Regulation No. 81 of 2024, which stipulates that tax obligations may be waived if they cannot be fulfilled due to inadequate infrastructure, disrupted communication systems, or disaster conditions. Disaster-affected taxpayers are also exempt from administrative penalties, and the collection of Article 22 Income Tax is excluded for donated goods intended for social, humanitarian, or disaster relief purposes.

Furthermore, the Ministry of Finance will grant a value-added tax (VAT) exemption for clothing donations distributed to disaster-affected areas. This decision was approved by President Prabowo Subianto during a Cabinet Meeting on Monday, December 15, 2025.

Minister of Home Affairs Tito Karnavian revealed that two garment companies located in special economic zones intended to donate approximately 125,000 pieces of leftover export clothing, but encountered licensing obstacles involving Customs and the Ministry of Trade.

President Prabowo welcomed the initiative and approved the VAT exemption for the donated clothing, stressing that strict supervision must be ensured and that the Ministry of Home Affairs will be responsible for overseeing the distribution so the aid reaches disaster victims promptly.