Background
In late 2024, Coordinating Minister for Economic Affairs, Airlangga Hartarto, announced a series of fiscal stimulus packages for 2025. In a press release (Number HM.4.6/440/SET.M.EKON.3/12/2024), he stated that these measures are intended to maintain public welfare .
Key incentives to maintain purchasing power include Value-Added Tax (VAT) borne by the government incentive for property and electric vehicle purchases and Article 21 income tax borne by the government incentive for labor-intensive industries.
Following this announcement, the government issued Minister of Finance Regulation (Peraturan Menteri Keuangan / PMK) Number 10 of 2025, detailing the Article 21 income tax provisions for certain incomes borne by the government as part of the 2025 fiscal year economic stimulus.
Summary of the Regulation
PMK Number 10 of 2025 outlines the following key points:
The government will cover Article 21 income tax for certain employees of employers meeting specific criteria and requirements.
Article 21 income tax borne by the government incentive is provided from January to December 2025.
- Employers must meet the following criteria:
a. operating in the following industrial sectors:
- footwear;
- textile and apparel;
- furniture; or
leather and leather goods; and
b. have a business field classification code as specified in Appendix Point A of PMK Number 10 of 2025.
- Employees eligible for Article 21 income tax borne by the government incentive must meet the following requirements:
a. permanent employees with the following conditions:
- have a Taxpayer Identification Number (Nomor Pokok Wajib Pajak / NPWP) and/or National Identification Number (Nomor Induk Kependudukan / NIK);
- receive or earn a fixed and regular gross income of no more than IDR 10,000,000; and
- not receiving other Article 21 income tax borne by the government incentive based on tax laws and regulations.
b. non-permanent employees with the following conditions: - have an NPWP and/or NIK;
- receive wages that do not exceed an average of IDR 500,000 per day for daily, weekly, per-unit, or piecework payments, or an average of IDR 10,000,000 per month for monthly payments; and
not receiving other Article 21 income tax borne by the government incentive based on tax laws and regulations.
Article 21 income tax borne by the government incentive must be paid in cash by the employer.
Employers must provide Withholding Article 21 Income Tax Slips and report the use of incentives in the Periodic Article 21 Income Tax Return.
Relevant Provisions:
- Article 17 Section (3) of the 1945 Constitution of the Republic of Indonesia.
- Law Number 7 of 1983 regarding Income Tax as amended by Law Number 6 of 2023 regarding the Stipulation of Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation into Law.
- Law Number 17 of 2003 regarding State Finance.
