Indonesian Govt to Cover Income Tax for Workers in 5 Sectors
Reporter
April 17, 2026 | 10:57 am
TEMPO.CO, Jakarta – Indonesia's Ministry of Finance will bear the Income Tax (PPh) Article 21 for workers in five labour-intensive sectors throughout 2026, under Minister of Finance Regulation No. 105/2025 as part of the government’s economic stimulus package for the 2026 fiscal year.
The incentive is aimed at supporting economic growth “and reducing poverty and unemployment rates,” said Inge Diana Rismawanti, Director of Outreach, Services, and Public Relations at the Directorate General of Taxes, during a visit to PT Mitra Saruta Indonesia in Nganjuk, East Java, on Thursday, July 16, 2026.
The five sectors eligible for the government-borne PPh 21 (DTP) facility are footwear, textiles and textile products, furniture, leather and leather goods, and tourism. The facility applies to regular and fixed income components such as salaries and allowances throughout 2026.
Eligible recipients include permanent and non-permanent workers with monthly income below Rp10 million. For daily, weekly, piece-rate, or unit-based workers, the facility applies if their average daily wage does not exceed Rp500,000.
Workers must have a Taxpayer Identification Number (NPWP) or National Identification Number integrated into the tax administration system, and must not be receiving other government-borne PPh 21 incentives.
Under Article 5 of the regulation, the PPh 21 withheld from employee income is paid by the employer at the time of salary payment. The tax covered by the government is not treated as taxable income.
Employers are required to issue withholding documentation and report it in the monthly PPh Article 21 tax return.
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