DGT on Proposal on Tax-Exempt Old Age Security Disbursement Threshold

JAKARTA, DDTCNews - The Directorate General of Taxes (DGT) has stated that it is ready to comply with the government's decision regarding the proposed amendment to the tax provisions on old age security (jaminan hari tua/JHT in Indonesian) disbursements.

Director General of Taxes, Bimo Wijayanto, said the government is still reviewing a proposal from labour groups and the Presidential Special Adviser on Labour and Workers' Welfare, Said Iqbal, to raise the old age security disbursement threshold subject to final Article 21 Income Tax at a rate of 0%.

"As for us, it depends on the instruction. If it is indeed to be raised, for example, from IDR50 million to IDR100 million for the tax-exempt JHT amount, we will follow the instruction, or if it is raised above IDR100 million, we will also follow the instruction," he said, as quoted on Tuesday (14/7/2026).

Bimo stated that the DGT has received representations from workers requesting that the tax provisions on the old age security be reviewed. Nevertheless, the formulation and assessment of such fiscal policy falls under the authority of the Directorate General of Economic and Fiscal Strategy of the Ministry of Finance.

For this reason, the DGT is currently awaiting the government's decision. Once new provisions have been enacted, the DGT will implement the policy and simultaneously socialise them to the public and relevant stakeholders.

"We are, frankly, waiting, because this is in fact the domain of the Directorate General of Economic and Fiscal Strategy," said Bimo.

He added that, based on current data, approximately 95% of old age security disbursements remain within the bracket of up to IDR50 million and are therefore subject to final Article 21 Income Tax at a rate of 0%.

In addition, the DGT continues to strengthen compliance oversight through the exchange and matching of data with the Employment Social Security Administrative Body (BPJS Ketenagakerjaan in Indonesian). This measure is taken to ensure that companies have correctly withheld and filed tax as well as reported the actual number of workers.

"We work very closely with BPJS Ketenagakerjaan to ensure that withholding tax by corporations is commensurate with the number of workers covered under employment security protection," said Bimo.

Previously, the Presidential Special Adviser on Labour and Workers' Welfare, Said Iqbal, proposed that the old age security disbursement threshold subject to final Article 21 Income Tax at a rate of 0% be increased.

According to Said, the threshold needs to be raised from IDR50 million to IDR400 million, as the value established under Gov. Reg. 68/2009 no longer reflects current economic conditions.

"Under Gov. Reg. 68/2009, old age security of up to IDR50 million is not subject to tax. That was stipulated 17 years ago. In 2009, IDR50 million was equivalent to approximately 152 grammes of gold. Now, 152 grammes of gold is worth approximately IDR400 million," he said following a meeting with Minister of Finance, Purbaya Yudhi Sadewa, last week. (dik)