Indonesia’s government is still weighing a plan to raise the non-taxable income threshold, known as PTKP, a change the employers’ association Apindo supports as a way to shore up middle-class purchasing power. The idea is potentially slated for the 2027 program, officials said Monday.
Officials urge caution
Juda Agung, Deputy Minister of Finance, said at an APBN KiTa press conference that the threshold “is still being studied in depth.” He flagged a trade-off facing policymakers: raising the threshold could lift household spending power but would also risk cutting income tax revenue. The government is considering aligning PTKP with the Provincial Minimum Wage, though no new figure or final decision has been set.
Current thresholds and support
Under current rules, a single taxpayer with no dependants has a PTKP of 54 million rupiah per year, equivalent to 4.5 million rupiah per month. A single taxpayer with one dependant, or a married taxpayer without dependants, has a threshold of 58.5 million rupiah per year.
Shinta Kamdani, Chair of Apindo, said a higher threshold would help workers. “If there is a PTKP increase, it will help,” she said. “It helps more in terms of work; with the PTKP increase, the tax levied will be on a higher value. The purpose is also for the middle class.” Apindo’s mid-year outlook survey had pointed to a decline among the middle class affecting purchasing power more broadly.
Apindo has also flagged separate concerns about tax holiday and tax allowance facilities, which it says face administrative challenges, along with the pace of tax refunds, which matters for company cash flow.
Related: Indonesia's 2027 minimum wage talks eye 9.5% rise, unions push protests
Source: APBN KiTa
