MoF: 95% of JHT Claims Already Exempt from Tax

JAKARTA, DDTCNews - The Ministry of Finance (MoF) has recorded that the majority of old age security (jaminan hari tua/JHT in Indonesian) benefits disbursed by BPJS Ketenagakerjaan members are already exempt from income tax.

Of the total 1.72 million JHT claims from January to May 2026, some 1.64 million claims are exempt from income tax as the disbursement value does not exceed IDR50 million. See the Focus Report entitled Preparing for Retirement: Understand the Tax Scheme.

"The Government provides a facility in the form of a 0% final income tax rate on the disbursement of JHT benefits at retirement for amounts up to IDR50 million," the MoF wrote in an official statement, as cited on Tuesday (30/6/2026).

Accordingly, only 78,441 JHT disbursement claims are subject to a final Article 21 Income Tax of 5% on the portion of JHT disbursements exceeding IDR50 million, as stipulated under Government Regulation (Gov. Reg.) No. 68/2009.

The imposition of a 5% final Article 21 income tax on JHT claims exceeding IDR50 million constitutes a special treatment that is considerably more favourable than taxation pursuant to the general provisions.

"The granting of this incentive is not a new policy, but rather a provision that has long been in force," the MoF wrote.

In addition to the facility of final Article 21 Income Tax treatment, JHT contributions paid by employees or employers are also exempt from income tax. The management of JHT by BPJS Ketenagakerjaan, in its capacity as a pension fund, is likewise exempt from income tax.

This is consistent with the exempt-exempt-taxed (EET) approach applied by Indonesia and the majority of Organisation for Economic Co-operation and Development (OECD) member states taxing retirement income.

"Through this scheme, the state is present to provide fairness, ease and simplicity for workers in their old age," the MoF explained. (rig)