Jakarta. The Association of All Indonesian Workers (Aspirasi) has welcomed the government’s decision to exempt income tax (PPh 21)  for employees earning less than Rp 10 million (around $600)  a month, calling it a concrete step to support low- and middle-income workers.

Aspirasi President Mirah Sumirat said the move would ease the burden on workers and allow them more room to cover daily needs as living costs continue to rise. Higher take-home pay would boost purchasing power and, in turn, strengthen household consumption as the backbone of Indonesia’s economy.

“This relief not only lightens workers’ expenses but also has the potential to stimulate production and open up new jobs,” Mirah said on Thursday.

She stressed that the exemption is part of a broader government package of eight measures aimed at accelerating economic growth in 2025. The programs range from food aid and cash-for-work initiatives to incentives for tourism workers, housing benefits for employees, and regulatory streamlining.

According to Mirah, such measures, if implemented effectively, could help address both short-term challenges of rising prices and longer-term structural issues in employment and productivity.

However, Mirah cautioned that the tax relief should not be used as a pretext by companies to hold back wage increases. She urged the government to ensure businesses comply with pay adjustments in line with regulations and economic conditions, stressing that workers’ rights to fair wages must remain a priority alongside fiscal incentives.

She also called on authorities to close loopholes in corporate taxation and expand the tax base among high-income earners and large companies. “We will continue to monitor this policy so that it truly benefits workers while strengthening social justice in Indonesia,” she said.

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