Personal Tax Relief Rise Has Prabowo‘s In-Principle Approval

JAKARTA, DDTCNews - Various tax reliefs, including a rise in the personal tax relief (penghasilan tidak kena pajak/PTKP in Indonesian) threshold and an expansion of the coverage of government-borne (ditanggung pemerintah/DTP in Indonesian) Article 21 Income Tax, have received in-principle approval from President Prabowo Subianto. The said in-principle approval is set out in the Minister of State Secretary Letter No. B-40/M/SDK/KI.00/10/2026 dated 20 October 2026.

In terms of the rise in the personal tax relief, Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that the personal tax relief threshold will rise taking inflation and the regency/municipal minimum wage (upah minimum kabupaten/kota/UMK in Indonesian) into account. The precise new personal tax relief figure has yet to be determined.

"The review of the increase in the personal tax relief, which currently stands at IDR54 million, will of course take inflation and the minimum wage into account," said Airlangga at the plenary cabinet session, as quoted on Friday (23/10/2026).

In addition, the government will also provide the government-borne Article 21 Income Tax facility for workers across all sectors. This incentive will be disbursed from January through December 2027 for workers with a maximum salary of IDR10 million per month. "Government-borne Article 21 Income Tax is for workers with a maximum salary of IDR10 million. This applies to all sectors," said Airlangga.

The government-borne Article 21 Income Tax facility is planned to be granted pursuant to a minister of finance regulation (MoF Reg.) that will be finalised before 1 January 2027.

Beyond the above incentives, the government will also continue to provide the government-borne VAT incentive for the transfer of residential properties. The government-borne VAT incentive applies to the fraction of the selling price of a property up to IDR2 billion. The ministerial regulation concerning the granting of the government-borne VAT incentive will likewise be finalised before 1 January 2027.

Finally, the government will revise Gov. Reg. 49/2022 to grant a VAT exemption on gold with a purity of 99.9%. The said revision also allows the granting of VAT incentives on silver.

"For the jewellery sector, there is a change from the 99.99% standard. In fact, the industry standard should be 99.9%. That is all, Mr President; we await your direction," said Airlangga. (dik)