Politics · Indonesia · 3 hrs ago
Indonesian Labor Leader Seeks Higher Tax-Free JHT Limit
Said Iqbal wants Indonesia to raise the tax-free JHT limit from Rp50 million to Rp400 million.
JHT is a retirement savings fund built from workers’ required contributions, and the tax can apply when they withdraw it.
Iqbal says the current limit dates to 2009 and argues that Rp50 million then would equal about Rp400 million now, based on the price of gold.
He says workers can face tax of up to 5%, including when they withdraw savings after losing their jobs.
He says the tax can apply to the savings principal, unlike tax on bank savings, which he says applies to interest.
Iqbal would prefer to remove the JHT tax, but says raising the threshold is an alternative; he also wants tax removed from holiday allowances, pension benefits and severance pay.
The government has not decided on the proposal, which Iqbal says was previously considered by a government team, and he plans to raise it again with Finance Minister Suahasil Nazara.
Said Iqbal has asked the Indonesian government to raise the tax-free limit for workers’ old-age savings, known as JHT, from Rp50 million to Rp400 million.
He said workers withdrawing up to Rp400 million should not pay income tax on the savings.
Iqbal argued that the Rp50 million limit, set in 2009, no longer reflects changes in the value of money.
He said JHT tax can burden workers, especially those withdrawing savings after losing their jobs.
Iqbal said he would raise the proposal again with Finance Minister Suahasil Nazara after earlier discussions produced no decision.
- Who
- Said Iqbal, president of the Indonesian Trade Union Confederation and the Labour Party.
- What
- He called for the JHT tax-free limit to rise from Rp50 million to Rp400 million, and said he also supports removing the tax entirely.
- When
- He made the request at an online news conference on November 3, 2026.
- Where
- The news conference was held online; the proposal concerns Indonesia.
- Why
- He said the current limit dates from 2009 and that taxing JHT withdrawals can burden workers, particularly those who have lost their jobs.
This story does not have two clearly opposing sides.
The JHT tax threshold was set at Rp50 million, according to Iqbal.
Iqbal said the government formed a team to consider a zero tax rate or raising the threshold to Rp400 million, but no decision was reached.
Iqbal called for the tax-free JHT limit to rise to Rp400 million at an online news conference.
Iqbal said he planned to present the proposal again to Finance Minister Suahasil Nazara.
- Current tax-free threshold
- Rp50 million
- Proposed tax-free threshold
- Rp400 million
- Historical reference
- Rp50 million in 2009 was equivalent to about 154 grams of gold, according to Iqbal
- Potential tax rate
- Up to 5 percent, with progressive rates, according to Iqbal
- Other tax relief sought
- Removal of taxes on holiday allowances, pension benefits and severance pay for workers laid off
What people are saying
If the JHT tax threshold is changed in 2026 using 154 grams of gold, it would be Rp400 million. So JHT of Rp400 million or less should not be taxed. Above Rp400 million can be taxed.
If we save in a bank, a commercial savings account, the government taxes the interest. The principal deposited or saved is not taxed. But strangely, this mandatory social savings is taxed on the principal, not the interest.
At that time, the discussion was almost decided. One option was a 0 percent JHT tax, or raising the taxable balance limit from Rp50 million; our proposal then was Rp400 million, using the gold price standard. With the new minister, I have to start again from the beginning.