Salaries of 7.54 Million Employees to Be Tax-Free in 2027

JAKARTA, DDTCNews - The government is preparing an economic stimulus in the form of a government-borne (ditanggung pemerintah/DTP in Indonesian) Article 21 Income Tax incentive for workers across all business sectors. The policy is planned for launch in 2027.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, estimates that the government-borne Article 21 Income Tax incentive could benefit around 7.54 million eligible workers, namely those earning no more than IDR10 million per month.

"The government-borne income tax is mostly for the formal sector, with income tax borne by the government for [workers] with salaries of up to IDR10 million," he said at his office on Monday (9/11/2026).

Airlangga explained that, as with 2026, the government-borne Article 21 Income Tax incentive in 2027 will target workers with gross income of no more than IDR10 million per month.

By way of comparison, the government-borne Article 21 Income Tax incentive in 2026 was provided only to workers in 5 business sectors. Those five sectors comprised footwear, textiles and apparel, furniture, leather and leather goods and tourism.

Meanwhile, the government-borne Article 21 Income Tax incentive in 2027 is designed to cover workers across all business sectors.

Under the government-borne Article 21 Income Tax scheme, the income tax on the salaries of eligible workers will be borne by the government. As a result, workers will not need to shoulder the Article 21 income tax burden, meaning their take-home pay will be higher.

However, Airlangga has yet to elaborate on the plans to expand the scope of recipients of the government-borne Article 21 Income Tax incentive. The government has also yet to issue technical provisions regarding the implementation of the incentive in 2027.

Accordingly, certainty regarding the granting of the government-borne Article 21 Income Tax facility for workers across all business sectors remains subject to further regulation. (rig)