Maudey Khalisha, Jakarta – The government has officially extended income tax relief for workers in selected labor-intensive sectors by continuing the government-borne income tax (PPh 21 DTP) scheme throughout 2026, as part of a broader economic stimulus package aimed at supporting household purchasing power.
The policy is stipulated in Finance Ministry Regulation (PMK) No. 105/2025, which provides tax relief for employees working in five business sectors: footwear, textiles and apparel, furniture, leather and leather goods, as well as tourism.
The incentive is available to both permanent and nonpermanent employees, provided they meet specific eligibility criteria and are not receiving similar tax incentives under other schemes. Eligible workers must earn a fixed and regular gross monthly income of no more than Rp 10 million (US$600).
According to the regulation, the measure is intended to help maintain people's purchasing power while supporting the government's economic, social and stabilization functions in 2026.
"To safeguard the sustainability of public purchasing power and carry out economic and social stabilization in 2026, the government has established an economic stimulus package, including the provision of fiscal facilities," the regulation states.
A Bank Indonesia (BI) survey showed that retail sales and consumer confidence weakened in mid-2025 before rebounding toward the year-end.
According to preliminary data published on Dec. 10, the retail sales index (RSI) was projected to climb to 222.1 in November, marking a solid 5.9 percent year-on-year (yoy) increase from 209.7 in November 2024.
In a statement released alongside the data, BI spokesperson Ramdan Denny Prakoso said the growth was mainly driven by "increasing demand ahead of preparations" for Christmas and the New Year.
A similar positive trend was reflected in BI's Consumer Survey for November, in which the consumer confidence index (CCI) rose to 124 points from 121.2 in October, largely reflecting improved economic expectations after the index dipped to a multiyear low in August.
Separately, the Finance Ministry has expanded tax reporting in the digital economy by requiring payment service providers and electronic money operators to report financial information to the tax authority starting this year.
The policy is stipulated in Finance Ministry Regulation (PMK) No. 108/2025, which came into force on Jan. 1.
The regulation brings payment service providers (PJP) and electronic wallet (e-wallet) operators into the financial information reporting framework overseen by the Taxation Directorate General (DJP).
Under the new rule, PJPs, both banks and nonbank institutions, are classified as deposit-taking institutions if they manage certain electronic money products or central bank digital currency instruments.
As a result, account and transaction data managed by e-wallet providers may be accessed as financial information for tax purposes.
The regulation also updates Indonesia's automatic exchange of information (AEOI) regime by extending reporting obligations to crypto assets. This adjustment aligns domestic rules with the Crypto-Asset Reporting Framework (CARF) and amendments to the Common Reporting Standard (CRS) developed by the Organisation for Economic Co-operation and Development (OECD).
"The DJP is authorized to obtain access to financial information for tax purposes from financial institutions and CARF-reporting crypto-asset service providers," the regulation states.
Such access includes the automatic receipt of financial information, as well as information, evidence or explanations obtained upon request.
Source: https://asianews.network/indonesia-extends-income-tax-relief-for-labour-intensive-industries