Indonesia still reviewing income tax exemption threshold
No new threshold or implementation date has been announced. The current exemption is Rp54 million a year, equivalent to Rp4.5 million a month.
Indonesia has yet to finalise a proposed change to its tax-free income threshold, Deputy Finance Minister Juda Agung said in Jakarta on 2 November 2026. The government is continuing discussions on the exemption, known as PTKP.
The proposal emerged alongside the government's announcement of tax incentives for 2027. Coordinating Minister for Economic Affairs Airlangga Hartarto outlined the package in early October 2026 after meeting President Prabowo Subianto at the State Palace.
The initial plan was to adjust PTKP in line with provincial minimum wages. However, the government has not specified how much the threshold would rise or when a change would take effect.
Director-General of Taxes Bimo Wijayanto said separately that he was not concerned an adjustment would disrupt tax receipts. Speaking in Bogor in October, he said his office had prepared scenarios despite not having received instructions to proceed.
Bimo said those scenarios had been submitted to the Finance Ministry's Directorate General of Economic and Fiscal Strategy for further examination. If the policy goes ahead, he said he would seek to broaden the tax base to maintain revenue.
