The government has once again introduced a tax incentive eagerly awaited by many workers and business players. Through Minister of Finance Regulation Number 10 of 2025 (PMK 10/2025), the government established a policy on Article 21 Income Tax Borne by the Government (DTP) aimed at easing the income tax burden of employees, maintaining public purchasing power, and providing stimulus for labor-intensive industries.
Who Is Eligible?
Several requirements must be met by both employers and employees:
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Employers
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Must conduct business activities in certain sectors: footwear, textiles & garments, furniture, leather & leather goods.
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Must have a business classification code (KLU) as listed in the appendix of PMK 10/2025.
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Employees (permanent and non-permanent)
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Must have a Taxpayer Identification Number (NPWP) and/or National Identity Number (NIK) that has been registered & integrated with the Directorate General of Taxes system.
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Gross regular income must not exceed IDR 10,000,000 per month for monthly-paid employees.
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For non-permanent employees, if wages are paid daily/contract-based/weekly/etc.: the average per day must not exceed IDR 500,000; or if paid monthly, still not exceeding IDR 10 million.
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Must not be receiving other Article 21 DTP tax incentives.
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Mechanism & Financial Rights
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Employers pay employees’ income in full without withholding Article 21 Income Tax, as the tax is borne by the government.
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Employees still receive regular salary and allowances; if there is in-kind compensation or benefits, it will still be counted if it meets the criteria.
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Employers must prepare proof of Article 21 tax withholding, even though the tax is borne by the government, and file monthly Article 21/26 tax returns (SPT Masa).
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For the use of the incentive during 2025, reporting and any amendments to the tax return must be submitted no later than January 31, 2026.
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If the employer fails to report or meet the requirements, the incentive will not be granted, and Article 21 tax obligations revert to normal.
Policy Expansion
Recent developments indicate that the government plans to expand the scope of Article 21 DTP benefits to other sectors beyond labor-intensive industries:
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The tourism sector, particularly hotels, restaurants, and cafes (horeka), is under discussion to be included as beneficiaries.
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The government is also preparing a budget and mechanism so that the horeka sector can soon enjoy this facility by the end of 2025.
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The estimated number of workers who may benefit from this expansion is around 552,000 in the tourism sector.
Expected Impact
Some of the expected benefits of this policy include:
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Increased purchasing power for eligible employees, as they receive net income without Article 21 tax deductions.
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Incentives for employers in specific industries and the expanded sectors (tourism), making it easier to attract workers.
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Overall economic stimulus, especially during the upcoming holiday season (Christmas and New Year) and efforts to recover from the global economic downturn.
Conclusion
The Article 21 DTP policy under PMK 10 of 2025 is a strategic step by the government to assist employees earning below IDR 10 million per month and/or daily workers with relatively low income, particularly in labor-intensive industries. With clear requirements and a defined reporting mechanism, eligible employees can receive their full salary without deductions, while employers must still fulfill administrative obligations.
The expansion to the tourism sector (horeka) demonstrates the government’s commitment to widening the scope of this incentive so that more workers can benefit.
Author & Editor :
- Muhammad Arief Ramadhan, S.H.