Country: Indonesia
Compliance category: Income Tax
Regulatory Information:
Regulation: Peraturan Menteri Keuangan (PMK) Nomor 10 Tahun 2025
Notification date: February 04, 2025
Source: https://peraturan.bpk.go.id/Details/313517/pmk-no-10-tahun-2025
Updates in Compliance:
Summary:
The Minister of Finance (MoF) of the Republic of Indonesia introduces a Government-borne Article 21 facility as part of the 2025 Economic Stimulus to reduce employees’ tax burden.
Under this facility, Income Tax as per Article 21 of regulation PER 168 Year 2023 computed on employee’s salary income is borne by the Government on behalf employee’s falling under certain criteria.
Effective Date: February 04, 2025
Eligibility Criteria:
The eligibility criteria and reporting mechanism has been summarised below:
| Category | Eligibility Criteria |
| Employer |
|
| Employee |
|
| Employee’s Income |
|
| Other Requirements |
|
Reporting:
Employers are obliged to pay out to employees the Government borne Article 21 income tax in the form of cash and report the same to Government by submission of Notification Letter for the Article 21/26 Income Tax Period pertaining to tax period January to December 2025 before January 31, 2026.
Our Analysis:
This tax incentive plays a strategic role in strengthening Indonesia’s economy by supporting specific businesses.
By covering Income Tax Article 21 incentive for eligible workers, the government reduces labour costs for employers, encouraging them to expand operations and create more jobs.
This not only helps increase employment opportunities but also strengthens business stability and keeps vital industries running smoothly. Ultimately, the policy aims to support workers, drive industrial growth, and sustain Indonesia’s economy.
