Indonesia's government is extending the PPh 21 DTP income tax incentive for manufacturing and labor-intensive sectors through 2026. The policy allows workers to receive full salaries without tax deductions, with the government covering it in cash form. The announcement came during a Ministry of Finance working visit in Nganjuk on April 16, 2026.
Direktur Penyuluhan, Pelayanan, dan Hubungan Masyarakat of the Direktorat Jenderal Pajak, Inge Diana Rismawanti, explained the PPh 21 DTP incentive during the Ministry of Finance's working visit in Nganjuk on Thursday, April 16, 2026. "PPh 21 is covered by the government, meaning the gross income given to employees is not deducted for tax. So they (workers) receive it (salary) in full," she said.
The program was first implemented in 2025 with a budget allocation of nearly Rp400 billion, but uptake was suboptimal. For 2026, the budget is increased to nearly Rp500 billion to maximize utilization by December. Inge hopes businesses will make full use of it.
Employee criteria include permanent staff with maximum monthly income of Rp10 million and non-permanent workers with average daily wages up to Rp500,000 or not exceeding Rp10 million monthly. Employers must be in sectors like textiles, footwear, furniture, and leather products, with Klasifikasi Lapangan Usaha (KLU) per PMK 56 in DJP's database, and report via SPT Masa PPh Pasal 21.
President Director of PT Mitra Saruta Indonesia, Hoo Yanto Andrian, said the incentive has a real impact on its 1,700 textile workers. Inge added that workers feel helped, with one saying the cash aid is "handy for buying extra rice." The policy aims to reduce poverty, unemployment, and inequality while preserving purchasing power and boosting economic growth.
