Politics · Indonesia · 7 hrs ago
Indonesia clarifies tax rules for barbers and massage workers
Indonesia's tax agency has clarified that barbers and massage workers are not automatically taxed just because of their services.
Individuals generally owe income tax if their net income exceeds the tax-free threshold and they meet the legal requirements.
The tax treatment depends on how the work is organised, including whether it is a business or independent professional work.
Some eligible small businesses can use a final income tax rate of 0.5%.
Independent professional services instead follow standard personal income tax rules and cannot use that small-business rate.
The clarification followed viral claims about taxing all economic transactions, after presidential envoy Hashim Djojohadikusumo said much economic activity goes unrecorded; he cited an estimate of Rp10,000 trillion and said some unrecorded activity is ordinary, not illegal.
The government says tax duties should reflect taxpayers' ability to pay, while offering easier tax administration.
Indonesia’s tax office said barbers and massage workers may owe income tax depending on their income and the nature of their work.
Personal income tax is due when net income exceeds the non-taxable income threshold, subject to applicable rules.
Workers running qualifying businesses with certain gross turnover may use a 0.5% final income-tax scheme for micro, small and medium enterprises.
People whose earnings are classified as income from independent services instead follow the general personal income-tax rules.
The clarification followed social media discussion sparked by a statement about economic activity that goes unrecorded in Indonesia.
- Who
- Indonesia’s Directorate General of Taxes clarified the rules for barbers and massage workers.
- What
- Tax treatment depends on the nature of the work, the employment relationship and the source of income.
- When
- The article was published on November 10, 2026.
- Where
- Indonesia.
- Why
- The clarification followed viral discussion about unrecorded economic activity and whether the government would tax all transactions, including those of small businesses.
This story does not have two clearly opposing sides.
A statement by Hashim Djojohadikusumo about unrecorded economic activity went viral on social media.
The Directorate General of Taxes explained how income-tax rules apply to barbers and massage workers.
- Potential unrecorded activity
- 35%-40% of Indonesia’s economic activity, according to World Bank data cited by Hashim
- Estimated value
- Rp10,000 trillion
- Final income-tax rate
- 0.5% for qualifying micro, small and medium enterprise businesses
- VAT example
- 11% on the barber service Hashim described
What people are saying
In principle, every individual who earns income in Indonesia has tax obligations.
I usually have a barber come to my apartment once a month. He charges a fee. And I pay that fee without a receipt. And because there is no receipt, 11% VAT is not collected.