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View all search resultsIndonesia extends income tax relief for labor-intensive industries
Tax relief is provided for employees working in five business sectors: footwear, textiles and apparel, furniture, leather and leather goods, as well as tourism.
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A taxpayer takes a photo of the guideline for requesting online taxation services on Nov. 20, 2023, at a counter at the Kebayoran Baru 1 branch of the tax office in South Jakarta. (Kompas/Priyombodo)
T
he government has officially extended income tax relief for workers in selected labor-intensive sectors by continuing the government-borne income tax (PPh 21 DTP) scheme throughout 2026, as part of a broader economic stimulus package aimed at supporting household purchasing power.
The policy is stipulated in Finance Ministry Regulation (PMK) No. 105/2025, which provides tax relief for employees working in five business sectors: footwear, textiles and apparel, furniture, leather and leather goods, as well as tourism.
The incentive is available to both permanent and nonpermanent employees, provided they meet specific eligibility criteria and are not receiving similar tax incentives under other schemes. Eligible workers must earn a fixed and regular gross monthly income of no more than Rp 10 million (US$600).
According to the regulation, the measure is intended to help maintain people’s purchasing power while supporting the government’s economic, social and stabilization functions in 2026.
“To safeguard the sustainability of public purchasing power and carry out economic and social stabilization in 2026, the government has established an economic stimulus package, including the provision of fiscal facilities,” the regulation states.
Read also: Retail sales, confidence surge as holidays approach
A Bank Indonesia (BI) survey showed that retail sales and consumer confidence weakened in mid-2025 before rebounding toward the year-end.
