Government Eliminates Income Tax (PPH) 21 for Workers, Opening Opportunities New Job Creation
The government's decision to issue the 2025 economic package, which includes incentives for income tax (PPh) article 21 borne by the government (PPh DTP) until 2026 for workers, has been well received by many groups.
This policy also aims to provide stimulus to affected sectors, such as labor-intensive industries and tourism, as well as to strengthen fiscal justice for lower- to middle-income workers.
Member of Commission E of the East Java DPRD, Suwandy Firdaus, stated that this policy will provide greater financial flexibility, allowing them to meet daily needs amid rising living costs.
Moreover, this Nasional Demokrat (NasDem) politician said that this policy will strengthen the national economy, as public consumption will increase because people will have more money.
"Increased consumption will boost demand, which in turn can stimulate the production of goods and services," he said.
He added that as the economy improves due to rising consumption, it may trigger business expansion and the creation of new employment opportunities.
A positive development was announced by the government: starting October 2025, the government will eliminate PPh 21 for workers earning below Rp10 million per month, particularly those in labor-intensive and tourism sectors. This means income tax typically withheld from monthly salaries will instead be fully covered by the state.
