Good news for middle to lower-income workers. The government has officially determined that employees with a gross income below IDR 10 million per month will no longer have their Income Tax (PPh) Article 21 withheld throughout 2025.

This policy is part of the PPh 21 Borne by the Government (DTP) scheme, a fiscal measure designed to boost purchasing power and accelerate national economic recovery. With this new rule, the tax usually paid by companies to the state treasury is fully converted into additional net income for workers.

“The goal is simple: to strengthen household consumption, which has been the main driver of economic growth,” said a source at the Directorate General of Taxes.

What is Included as Tax-Free?

This category includes all regular worker income, from basic salary, fixed allowances, to benefits in the form of in-kind payments or other facilities received every month.

As a result, workers can take home their full salary without PPh 21 deductions, and this additional value is not considered a new taxable object.

Employer’s Responsibilities

However, employers still have administrative obligations. Every company utilizing this facility must submit a report on the realization of the incentive through the PPh 21/26 Periodic Tax Return (SPT Masa). If they fail to distribute the incentive or neglect to report it, the tax obligation returns to normal, and the right to the incentive is automatically lost.

Strict Supervision

The DGT emphasizes that supervision will be tightened through regular reporting and random audits. The government does not want this policy to be misused to avoid tax obligations.
“This incentive must reach the hands of eligible employees,” stressed the DGT.

Valid for the Full Year

This tax-free facility is valid from January to December 2025. Consequently, millions of formal sector workers will enjoy larger monthly incomes without tax deductions.

The government hopes this additional income can serve as an economic cushion for the middle and lower classes, who have been affected by inflation and global economic pressures. Furthermore, this increase in purchasing power is also expected to be a driver of national economic growth.

PPh 21 Borne by the Government (DTP)

This appears to be a reference to an Indonesian tax regulation, not a physical place or cultural site. “PPh 21 DTP” (DTP stands for *Ditanggung Pemerintah*, or “borne by the government”) was a COVID-19 relief policy where the government paid the income tax (PPh 21) for employees in specific sectors. The program was implemented to ease the financial burden on businesses and workers during the pandemic, stimulating economic activity.

Income Tax (PPh) Article 21

“PPh Article 21” is not a physical place or cultural site, but a key article within Indonesia’s income tax law. It governs the withholding, deposit, and reporting of income tax on employee salaries, pensions, and other regular payments. The regulation has evolved over time as part of Indonesia’s broader tax system reforms to streamline collection and ensure compliance.

Directorate General of Taxes

The Directorate General of Taxes is the government body responsible for tax policy and collection in Indonesia. It was formally established in 1945, shortly after the nation’s independence, to build a domestic revenue system for the new republic. Its history reflects the country’s ongoing efforts to modernize its tax administration and broaden its revenue base.

PPh 21/26 Periodic Tax Return (SPT Masa)

This is not a physical place or cultural site, but rather an Indonesian tax form. The “SPT Masa PPh 21/26” is a periodic tax return used by employers and withholding agents in Indonesia to report and pay income tax (PPh Article 21) on employee salaries and certain other payments, as well as final tax (PPh Article 26) on income paid to foreign taxpayers. Its history is tied to the development of Indonesia’s self-assessment tax system, which obligates entities to regularly report their tax withholdings to the Directorate General of Taxes.

DGT

I am unable to provide a summary for “DGT” as it is not a recognized or specific place or cultural site. The acronym could refer to many different things, such as a company, a code, or a local abbreviation. If you can provide the full name or more context, I would be happy to help.