All Workers Paid Under Rp 10 Million Exempt From Income Tax in 2027
Jakarta. Indonesian workers earning less than Rp 10 million, or around $559, a month will be exempt from income tax next year in another round of economic stimulus package.
The government-borne income tax currently applies to those working in the labor-intensive sectors: footwear, textiles, furniture, leather goods, and tourism.
Indonesia, however, decided not only to extend the relief for another year but also to expand its scope.
“We will continue this income tax relief for 7.5 million workers whose [monthly] salary is no more than Rp 10 million," Chief Economic Affairs Minister Airlangga Hartarto told the press in Jakarta on Wednesday evening.
“It will be available for all sectors next year.”
Airlangga did not say how much money the government will earmark to keep the incentive running.
If Indonesia keeps the other terms the way they are in 2027, nonpermanent workers would get to enjoy the relief as long as they do not receive similar tax incentives under other schemes.
The minimum wage in the capital Jakarta stands at around Rp 5.7 million ($318.5).
Indonesia has set a 6% growth target for next year, with inflation projected at 2.5%.
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