<![CDATA[This study aims to examine the dynamics of the Value Added Tax (VAT) increase policy in Indonesia and its implications for public purchasing power. Using the Systematic Literature Review (SLR) method on 12 SINTA-indexed scientific articles, this study analyzes the impact of the VAT rate adjustment from 10% to 11% up to the planned escalation towards 12% in accordance with the Law on Harmonization of Tax Regulations (UU HPP) No. 7 of 2021. The synthesis of the literature identifies four main impact clusters: (1) the erosion of purchasing power and shifts in public consumption patterns; (2) economic psychological dimensions and gender aspects; (3) operational pressure on the MSME sector; and (4) fiscal compliance risks and public accountability. These findings indicate that the VAT increase policy is dualistic; on one hand, it successfully increases state revenue, but on the other hand, it weakens public accessibility to basic needs, pressures the sustainability of MSMEs, and reduces voluntary tax compliance rates. This study recommends that the government optimize social safety nets, reform the VAT rate structure to be more progressive, provide stimuli for MSMEs, and enhance fiscal transparency as strategic steps to maintain domestic economic stability.]]>
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