Indonesia studies proposed income tax allowance adjustment for 2027
The Finance Ministry is assessing the effects on households and the state budget, while an official says the current allowance exceeds provincial minimum wages.
Indonesia’s Finance Ministry is examining the economic and budget implications of a proposal to adjust the personal income tax-free allowance for 2027, acting Director-General of Economic and Fiscal Strategy Hidayat Amir said.
The Coordinating Ministry for Economic Affairs submitted the proposal to the Finance Ministry. Its Directorate-General of Economic and Fiscal Strategy is now carrying out a more detailed assessment of how an adjustment would affect people’s finances and the state budget, Amir said in Jakarta on 13 November 2026.
Amir said the existing allowance, known as PTKP, is Rp4.5 million per month and remains above provincial minimum wages. He also said Indonesia’s threshold is relatively high compared with those in other countries and stands at 6.72 times the poverty line.
He stressed that the government still needed to weigh the consequences carefully, balancing the impact on state revenue against the effects on the public when considering an adjustment for 2027.
