{"id":31859,"date":"2025-02-27T11:00:24","date_gmt":"2025-02-27T05:30:24","guid":{"rendered":"https:\/\/akriviahcm.com\/resources\/?post_type=payroll_alerts&p=31859"},"modified":"2025-02-27T11:18:16","modified_gmt":"2025-02-27T05:48:16","slug":"government-borne-income-tax-benefit","status":"publish","type":"payroll_alerts","link":"https:\/\/akriviahcm.com\/resources\/global-payroll\/alerts\/government-borne-income-tax-benefit","title":{"rendered":"Government Borne Income Tax Benefit"},"content":{"rendered":"
\n

Country:<\/b> Indonesia<\/p>\n

Compliance category:<\/b> Income Tax<\/p>\n<\/div>\n

\n

Regulatory Information:<\/h2>\n

Regulation: <\/b> Peraturan Menteri Keuangan (PMK) Nomor 10 Tahun 2025<\/p>\n

Notification date: <\/b>February 04, 2025<\/p>\n

Source: <\/b>https:\/\/peraturan.bpk.go.id\/Details\/313517\/pmk-no-10-tahun-2025<\/a><\/p>\n<\/div>\n

\n

Updates in Compliance:<\/h2>\n

Summary:<\/strong><\/p>\n

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\u2019 tax burden.<\/p>\n

Under this facility, Income Tax as per Article 21 of regulation PER 168 Year 2023 computed on employee\u2019s salary income is borne by the Government on behalf employee\u2019s falling under certain criteria.<\/p>\n

Effective Date:<\/b><\/strong> February 04, 2025<\/p>\n

Eligibility Criteria:<\/b><\/strong><\/p>\n

The eligibility criteria and reporting mechanism has been summarised below:<\/p>\n\n\n\n\n\n\n\n
Category<\/b><\/strong><\/td>\nEligibility Criteria<\/b><\/strong><\/td>\n<\/tr>\n
Employer<\/b><\/strong><\/td>\n\n
    \n
  1. Engaged in business in the following industrial sectors:\n
      \n
    • Footwear<\/li>\n
    • Textiles and apparel<\/li>\n
    • Furniture<\/li>\n
    • Leather and leather goods<\/li>\n<\/ul>\n<\/li>\n
    • Engaged in businesses listed in Attachment Letter A of this Ministerial Regulation
      \n(Refer to the Appendix section of source document for details).<\/li>\n<\/ol>\n<\/td>\n<\/tr>\n
Employee<\/b><\/strong><\/td>\n\n
    \n
  1. Permanent employees: Includes individuals receiving income regularly, such as members of the Board of Commissioners, Board of Supervisors, and employees on fixed-term contracts.<\/li>\n
  2. Non-permanent employees: Includes freelance workers earning income based on working days, units of work produced, or task completion as per employer requests.<\/li>\n<\/ol>\n<\/td>\n<\/tr>\n
Employee\u2019s Income<\/b><\/strong><\/td>\n\n
    \n
  1. Gross income includes fixed and regular salary allowances for the tax period January \u2013 December 2025.<\/li>\n
  2. Permanent Employees: Gross income up to IDR 10 million\/month.<\/li>\n
  3. Non-Permanent Employees: Gross income up to IDR 10 million\/month or IDR 500,000\/day for daily\/weekly\/unit-based earnings.<\/li>\n<\/ol>\n<\/td>\n<\/tr>\n
Other Requirements<\/b><\/strong><\/td>\n\n
    \n
  1. Employees must have a Taxpayer Identification Number (NPWP) and\/or Population Registration Number (NIK) registered with the Directorate General of Population and Civil Registration and integrated into the Directorate General of Tax Administration system.<\/li>\n
  2. Employees must not have received any other Government-borne Article 21 Income Tax incentives as per existing tax laws and regulations.<\/li>\n<\/ol>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Reporting: <\/b><\/strong><\/p>\n

    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.<\/p>\n<\/div>\n

    \n

    Our Analysis:<\/h2>\n

    This tax incentive plays a strategic role in strengthening Indonesia\u2019s economy by supporting specific businesses. <\/p>\n

    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.
    \nThis 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\u2019s economy.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    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\u2019 tax […]<\/p>\n","protected":false},"author":1,"featured_media":0,"menu_order":0,"template":"","meta":{"_acf_changed":false,"footnotes":""},"countries":[714],"class_list":["post-31859","payroll_alerts","type-payroll_alerts","status-publish","hentry","countries-indonesia"],"acf":[],"yoast_head":"\nIndonesia\u2019s Government-Borne Income Tax Boosts Businesses<\/title>\n<meta name=\"description\" content=\"Indonesia's tax incentive lowers labor costs, supports businesses, and boosts job creation by covering Income Tax Article 21, 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