Business · Economy · 1 day ago

Indonesia Studies Raising Income Tax-Free Threshold

Indonesia Studies Raising Income Tax-Free Threshold

Indonesia's Finance Ministry is studying whether to raise the income tax-free threshold for individual taxpayers.

The current limit is Rp54 million a year, or Rp4.5 million a month, and has been unchanged since 2016.

The proposal is being discussed as a possible tax incentive for 2027, but the review is not finished.

Coordinating Economic Affairs Minister Airlangga Hartarto has said any new limit would not start in January 2027, and could take effect later.

Officials say they are weighing the benefits to workers against the effect on government revenue.

Tax chief Bimo Wijayanto says the current threshold is already high compared with income and poverty measures, while Finance Ministry officials say the revenue impact depends on taxpayers' income brackets.

The government has not set a new threshold or start date.

3 sources

Related

What people are saying

Airlangga HartartoCoordinating Minister for Economic Affairs
The discussion has not finished; it will not be implemented in January, perhaps we will do it after January.
via CNBC Indonesia
Bimo WijayantoDirector General of Taxes
If it's 5 percent, it's still very low.
via Tempo EN
Among OECD and G20 countries, Indonesia is among those that relatively apply a high PTKP. Around 67% of GDP per capita. Then 7 times the poverty line. So, interpret this academically as you wish.
via CNBC Indonesia