This study investigates the effect of changes in the Value Added Tax (VAT) rate on household expenditure for taxable food items and examines its implications for the distribution of tax burdens across income groups in Indonesia. The research is motivated by the implementation of Law Number 7 of 2021 on the Harmonization of Tax Regu-lations, which stipulates an increase in the VAT rate from 10 percent to 11 percent and subsequently to 12 percentt. The study employs the Seemingly Unrelated Regression (SUR) model using data from the 2020 National Socioeconomic Survey (SUSENAS) conducted by Statistics Indonesia (BPS) to estimate the elasticity of household expenditure in response to price changes across ten income deciles. The analysis distinguishes between taxable and non-taxable food categories to assess how VAT rate adjustments affect household spending behavior. The results indicate that price increases associated with higher VAT rates have a positive and statistically significant effect on household expenditure for taxable food items. Low-income households (decile 1) exhibit inelastic expenditure patterns due to subsistence consumption, while high-income households (deciles 9–10) also show inelasticity because of strong purchasing power. The analysis of tax burden distribution reveals an inverted U-shaped pattern, suggesting that lower-income groups bear a relatively higher proportion of the VAT burden compared to middle-and upper-income groups, confirming the regressive nature of VAT in Indo-nesia. These findings imply that an increase in VAT rates may worsen fiscal inequality and reduce social welfare if not accompanied by compensatory policies. Therefore, the government should consider implementing targeted cash transfer programs or food subsidies to protect vulnerable households and maintain purchasing power. © Premandaru I., Adrison V., 2026.