Hanoi (VNA) – The Indonesian government will cover personal income taxes for workers in labour-intensive sectors throughout the 2026 fiscal year, aiming to protect household purchasing power and maintain national economic stability amid ongoing global economic uncertainties.
The Indonesian Ministry of Finance announced that this policy applies to workers with a monthly gross income not exceeding 10 million IDR (about 598 USD). Labourers’ personal income tax obligations will be shouldered by the state.
The tax incentive policy outlined in the Finance Minister’s decision forms part of a broader economic stimulus package aimed at protecting social welfare and enhancing the Southeast Asian economy’s resilience to external shocks.
The beneficiaries are workers employed by companies in sectors specified by the government under designated business classification codes. These include textiles and garments, leather and footwear, furniture manufacturing, processing leather and related products, as well as tourism — the industries employing large workforces and prone to global economic downturns.
To qualify for the incentive, workers must have a tax identification number or a citizen identification number registered with the civil authority and integrated into the system of Indonesia’s Directorate General of Taxes. In addition, their monthly gross income must not exceed 10 million IDR, and they must not be receiving other tax incentives provided by the Indonesian government.
The Indonesian Ministry of Finance stressed that the government’s coverage of personal income taxes for labour-intensive workers aims to ease their living cost pressures, maintain domestic purchasing power, and thereby support economic growth and strengthen the country’s recovery capacity amid challenging conditions at the present./.
