Indonesia to Cover Income Tax for Labor-Intensive Workers in 2026
Jakarta. The Ministry of Finance will provide income tax relief for workers in labor-intensive industries throughout the 2026 fiscal year, as part of efforts to safeguard household purchasing power and maintain national economic stability.
The incentive applies to employees earning a gross monthly income of no more than Rp 10 million (about $598), according to a ministry statement.
The policy is stipulated under Finance Minister Regulation No. 105 of 2025, which outlines fiscal facilities introduced as part of a broader economic stimulus package aimed at protecting public welfare amid global economic challenges.
The tax relief is specifically targeted at workers employed by companies operating under designated business classification codes. Eligible sectors include textiles and garments, footwear, furniture, leather and leather goods manufacturing, as well as tourism.
To qualify for the incentive, workers must meet several criteria. They must have a registered taxpayer identification number or a national identification number that has been administered by the civil registration authority and integrated with the tax administration system of the Directorate General of Taxes.
In addition, eligible workers must earn no more than Rp 10 million in gross income per month and must not be receiving other tax incentives provided by the government.
The ministry said the measure is intended to ease cost-of-living pressures on workers in labor-intensive sectors, which are considered particularly vulnerable to external economic shocks, while supporting broader economic resilience.
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