Airlangga: 1.5% Final Tax on Authors‘ Royalties, Campaign Pledge

JAKARTA, DDTCNews - A final income tax of 1.5% on authors' royalty income constitutes one of 8 stimulus measures for the second half of 2026 prepared by the government.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that this policy is in line with President Prabowo Subianto's pledges made during the 2024 presidential election campaign.

"This is one of the President's campaign promises," said Airlangga, as quoted on Tuesday (23/6/2026).

At present, royalty income received by individual taxpayers who work as authors is subject to Article 23 Income Tax at 15%.

However, the Directorate General of Taxes (DGT), through the Director General of Taxes Regulation Number PER-1/PJ/2023, has decided to reduce the tax base (dasar pengenaan pajak/DPP in Indonesian) for Article 23 Income Tax on royalties received by individual taxpayers who use deemed profit (norma penghitungan penghasilan neto/NPPN in Indonesian).

The tax base for Article 23 Withholding Tax on royalties for such taxpayers has been reduced to 40% of the total royalty amount. Under this policy, the effective rate of Article 23 Income Tax on the said royalties is 6%.

Nevertheless, please note that authors' royalties are not currently subject to final income tax. Accordingly, royalties must be set off against other income to determine taxable income for a given tax year.

The income tax payable on royalties and other non-final income is calculated using progressive rates of 5% to 35% pursuant to Article 17 paragraph (1) of the Income Tax Law.

The 6% Article 23 Withholding Tax constitutes a tax credit that author taxpayers may claim when calculating the remaining income tax payable. (dik)