Director General of Taxes Opens Up on THR PPh Tax for Private Sector Being Government-Covered Like ASN

Jakarta, CNBC Indonesia – Director General of Taxes Bimo Wijayanto spoke out on the controversy over income tax (PPh) Article 21 for private-sector employees being taxed, while civil servants (ASN), the Indonesian National Armed Forces (TNI), and the Indonesian National Police (Polri) are funded by the government, i.e., tax borne by the government. Bimo explained that in fact the burden of PPh Pasal 21 in the private sector is often borne directly by the employer, similar to how the government bears the income tax for public sector employees. ‘This is something I can say: in the private sector there is also a tax allowance facility, the tax is borne by the employer, and this cost can also be deducted as deductible expenses,’ he said during a Tax Class programme at the DJP headquarters in Jakarta, quoted on Thursday (5 March 2026). In addition, Bimo emphasised that for certain workers in labour-intensive sectors, the government has already provided incentives in the form of income tax borne by the government, as set out in the Ministry of Finance Regulation (PMK) Number 105 of 2025. ‘Some employees in specific sectors are also provided PPh 21 borne by the government; the latest regulation is PMK 105 of 2025,’ he asserted. Yon Arsal, Senior Advisor to the Finance Minister on Tax Compliance, added that, specifically for taxes imposed on additional income, such as the Hari Raya allowance, i.e., THR, these are also taxed as in previous years. For example, last year, when the government implemented the average effective rate (AER) scheme, which made the tax burden appear heavy during THR, in fact it had already been deducted in proportion to the employee’s monthly income. ‘Because previously the tax burden was concentrated in December, it is now spread more evenly across nearly every month. So people will find that if the THR is taxed now, in December the deduction won’t be as large,’ he said. Therefore, he confirmed that this year there will be no change to the income tax collection scheme, including additional income such as THR. Although the TER scheme may be evaluated. ‘Of course we will evaluate it, because there are many other factors involved. Whether the amounts, the rates are as we stated before. We at DJP will keep monitoring. Whether the rate amounts are appropriate or not. We want there to be no underpayment or overpayment; ideally as little as possible,’ Yon said.