Amendment to Regulation of the Minister of Finance Ensures that Article 21 Income Tax is Covered Until 2026

The government has confirmed that they will continue providing the incentive for Article 21 Income Tax (Pajak Penghasilan– “ PPh ”) Borne by the Government (Ditanggung Pemerintah– “ DTP ”) until 2026. This is outlined under the Draft Amendment to Regulation of the Minister of Finance No. 10 of 2025 (“ Permenkeu 10/2025 ”). The amendment to Permenkeu 10/2025 is prepared to respond to global dynamics while strengthening the foundation of the national economy.

“This regulation will govern Article 21 PPh on certain income borne by the government in the framework of economic stimulus for the 2025 Fiscal Year,” said Unan Pribadi, Director of Harmonization of Laws and Regulations III (Harmonisasi Peraturan Perundang-undangan– “ HPP III ”) at the Directorate General of Laws and Regulations (Direktorat Jenderal Peraturan Perundang-undangan– “ DJPP ”), Ministry of Law, in an interview with Hukumonline.

Income eligible for the Article 21 PPh DTP facility includes fixed and regular monthly salaries and allowances, or similar fixed or regular compensation. Furthermore, the government will also extend the 0.5% final PPh incentive for Micro-, Small-, and Medium-scale Enterprises (“ MSMEs ”) with annual turnover of up to Rp 4.8 billion, which is confirmed to be valid until 2029, so it will no longer need to be extended annually.

“The harmonization between ministries/agencies is currently in the process,” added Unan.