JAKARTA, The Kabar News—Indonesia plans to extend government-borne Article 21 income tax relief to about 13 million formal-sector workers earning less than Rp10 million (US$594) per month in 2027, Coordinating Economy Minister Airlangga Hartarto said on Monday, Nov. 9.

The proposed expansion would make the PPh 21 DTP incentive available across employment sectors. Under the scheme, the government covers eligible employees’ income tax, allowing employers to pass the amount to workers instead of withholding it from their pay.

“There are around 13 million people earning below Rp10 million,” Airlangga told reporters at the Coordinating Economy Ministry in Jakarta.

The 13 million figure represents an updated estimate. In September, the government said the planned 2027 expansion would reach approximately 7.5 million workers. Officials have not publicly explained the methodology behind the higher projection or confirmed the program’s final budget.

The government must still issue an implementing Finance Ministry regulation before the 2027 program can take effect. The regulation will determine which workers and employers qualify, the applicable tax periods and the reporting requirements.

The existing 2026 arrangement operates under Finance Ministerial Regulation No. 105/2025. It covers eligible workers in designated labor-intensive and tourism-related industries who receive fixed and regular gross monthly income of no more than Rp10 million.

Eligible employees must have a taxpayer identification number or a national identification number linked to the tax administration system. Employers must report the incentive and provide the government-covered tax amount directly to employees.

The Rp10 million threshold does not mean every worker below it currently pays income tax. Employees whose taxable income remains below the personal income tax allowance may owe little or no PPh 21. The financial benefit will therefore differ according to each worker’s taxable income and personal circumstances.

The government’s 2027 economic stimulus announcement said the PPh 21 incentive would expand from selected industries to all sectors.

Airlangga also discussed the 2026 Wage Subsidy Program (BSU). However, BSU is separate from the planned 2027 income tax incentive and targets lower-paid workers through direct cash transfers.

The government provides BSU recipients with Rp300,000 per month for three months, paid as a Rp900,000 lump sum. Although Airlangga referred to workers earning below Rp3 million, the Labor Ministry’s official BSU portal sets the maximum at Rp3.5 million per month or the relevant provincial or municipal minimum wage.

Applicants must also be Indonesian citizens and active wage-earner participants in BPJS Ketenagakerjaan through August 2026. Civil servants, military personnel and police officers cannot receive the assistance.

Labor Minister Yassierli said his ministry would verify prospective recipients after the Finance Ministry completed its review.

“The initial data are now being finalized by the Finance Ministry. We will validate and verify them again,” Yassierli said.

The final reach of both programs will depend on the regulations, accurate worker records and employer compliance. Until the government publishes the 2027 tax regulation and completes BSU verification, the announced figures remain targets rather than confirmed recipient totals.