January 6, 2026 | 05:00 pm
TEMPO.CO, Jakarta - The Indonesian Workers Welfare Union (KSBSI) assesses that the income tax exemption incentive (PPh) Article 21 for workers in labor-intensive sectors can boost purchasing power, especially for low to middle-income workers. According to Minister of Finance Regulation Number 105 of 2025, this PPh facility applies to workers earning less than Rp10 million.
According to KSBSI President Elly Rosita Silaban, the tax exemption will increase the net wages received by workers every month. "This policy has the potential to boost purchasing power, especially for low to middle-income workers in labor-intensive sectors, as the additional income goes directly into consumption," said Elly when contacted on Tuesday, January 6, 2026.
Elly stated that the policy provides breathing space for workers affected by the rising prices of basic needs. However, she mentioned that workers hope this policy will be implemented transparently with a clear validity period. Elly also said that this policy must be accompanied by supervision to ensure compliance by employers.
Although considered able to boost purchasing power, Elly believes that the effect of this policy will be stronger if accompanied by controlled basic inflation, stable job certainty, as well as integration with social protection and increased productivity. "The sustainability of its impact depends heavily on price stability, job certainty, and complementarity with other policies," said Elly.
Minister of Finance Regulation Number 105 of 2025 was signed by Finance Minister Purbaya Yudhi Sadewa and enacted on December 31, 2025. This policy is part of the 2026 economic stimulus package.
"To maintain the sustainability of people's purchasing power and to carry out the function of economic and social stabilization in 2026, an economic stimulus package has been established as a government effort to maintain the level of public welfare, including providing fiscal facilities," as written in the policy, quoted on Tuesday, January 6, 2026.
According to this regulation, income tax exemptions are given to workers in five sectors: footwear, textiles and finished clothing, furniture, leather and leather goods, and tourism. Workers receiving this incentive must have a Taxpayer Identification Number and/or a Population Registration Number. Then, they must meet the requirement of having a gross monthly income of no more than Rp10 million.
Read: 3 Factors That Could Push Inflation Above 3% in the First Quarter
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