Indonesia plans to raise the income tax-free threshold in 2027 for the first time since 2016, while expanding tax exemptions for workers earning below IDR 10 million per month and providing IDR 31 trillion in direct support to low-income households.
The Indonesian government announced plans to increase the income tax-free threshold for the first time in ten years. Airlangga Hartarto, Coordinating Minister for Economic Affairs, revealed the decision on 1 October 2026 as part of a broader stimulus effort aimed at boosting household spending power.
The current threshold stands at IDR 54 million annually. This limit has remained unchanged since 2016. The government is now calculating a revised amount for implementation in 2027, though officials have not yet disclosed the specific new threshold.
Expanded exemptions for monthly earners
The government also expanded an existing income tax exemption to reach all workers earning below IDR 10 million per month. Previously, this exemption applied only to workers in labour-intensive and tourism sectors. The expanded policy increases eligibility across all industries.
Support for low-income households
The economic stimulus package includes IDR 31 trillion in direct support to low-income households during the final quarter of 2026. This money will fund cash transfers and food assistance programs.
A tax exemption on certain property sales will continue through 2027, extending a benefit introduced in earlier stimulus measures announced earlier in 2026.
These measures form part of the government’s ongoing strategy to strengthen household purchasing power and stimulate broader economic activity.
