Government Reluctant to Raise IDR4.5 M/Month Personal Tax Relief Thres

Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed the government does not plan to revise the current policy concerning personal tax relief. The threshold of IDR54 million per year or IDR4.5 million per month remains in effect for single individual taxpayers.

“[Personal tax relief] should not be increased yet,” he stated to the media at the Office of the Coordinating Ministry for Economic Affairs on Friday (5/16/2025).

However, Airlangga did not disclose the reasons behind the decision not to raise the personal tax relief. He only stated that the government had provided various incentives as a stimulus for the broader community.

He further mentioned that the government is currently conducting further assessments of the incentives that have been disbursed.

Earlier, during the May Day 2025 rally, the Federation of Indonesia Metal Workers' Unions (Federasi Serikat Pekerja Metal Indonesia/FSPMI in Indonesian) in the May Day 2025 action had urged the government to increase the personal tax relief threshold to IDR10 million.

In addition to updates on the increase in personal tax relief, there are several other noteworthy topics to revisit. These include a warning for taxpayers who ignore reprimand letters from the Directorate General of Taxes (DGT), the application for Article 25 Income Tax instalment reduction through the coretax system and the ongoing efforts by the DGT to improve the coretax system’s latency.

Below is a comprehensive review of the tax articles.

Increase in Personal Tax Relief to Boost Consumption

Head of the Employment Affairs Division of the Indonesian Employers’ Association (Asosiasi Pengusaha Indonesia/Apindo in Indonesian), Bob Azam, sees the increase in personal tax relief as a strategy to stimulate domestic consumption, specifically for the middle class.

He believes that raising personal tax relief will reduce the tax burden on the community, particularly the middle class. However, he did not specify the expected amount of the increase.

“Regardless of the form of incentive, it will certainly be valuable, but ideally, increasing personal tax relief [for the middle class] would be best,” remarked Bob.

Obligation to Respond to the DGT's Reprimand Letter

The Directorate General of Taxes (DGT) will issue tax collection notices to both corporate and individual taxpayers that fail to respond to reprimand letters.

Dwi Astuti, Director of Tax Dissemination, Services, and Public Relations at the DGT, stated that the delivery of reprimand letters and tax collection notices is a follow-up to of the annual tax return examination activities conducted by the Tax Office (Kantor Pelayanan Pajak/KPP).

“Should taxpayers fail to respond to the reprimand letter, the DGT will issue a notice of tax collection,” she remarked.

Application for Article 25 Income Tax Instalment Reduction via the Coretax

Taxpayers can now apply for Article 25 Income Tax instalment reduction online through the coretax administration system, also known as the DGT Coretax.

Director of Tax Dissemination, Services, and Public Relations of the DGT, Dwi Astuti, claimed that the DGT Coretax portal is now available to accommodate taxpayers wishing to apply for Article 25 Income Tax instalment reduction.

"The application can now be submitted through the DGT coretax,” she said.

Progress of Coretax Latency Improvements

The DGT has reported the progress of the improvement of the Coretax administration system as of 6 May 2025. One key improvement is the reduction of waiting time or latency when accessing the DGT Coretax.

Via social media, the tax authority claims that the login and access latency to the DGT Coretax has become faster. Similarly, the waiting time for issuing tax invoices and generating withholding slips has now decreased.

“The Directorate General of Taxes seeks to perform continuous improvements towards a reliable and modern tax administration system,” said the Directorate General of Taxes.

OECD Updates GMT Guidance

The Organisation for Economic Co-operation and Development (OECD) has revised its guidelines for applying the global minimum tax (Global Anti-Base Erosion (GloBE) model rules). These guidelines are outlined in a consolidated commentary on the GloBE rules.

The consolidated commentary document, published by the OECD on 9 May 2025, also incorporates all administrative guidance issued and approved by the Inclusive Framework from March 2022 to 31 March 2025.

“As Inclusive Framework jurisdictions begin to implement the GloBE rules in 2024, the text of the Commentary has been updated to incorporate the various pieces of Administrative Guidance that were approved by the Inclusive Framework before the end of March 2025,” the OECD stated. (sap)