PRESIDENT Prabowo Subianto ushered in 2025 with a policy flip-flop that rattled the markets. On New Year’s Eve, the government abruptly reversed its stance on the planned increase in value-added tax (VAT) from 11 percent to 12 percent, which was scheduled to take effect on January 1, 2025. The hike, for now, being limited to ultra-luxury goods and services.

This last-minute policy shift has not only baffled investors in the financial marke