Proposal to Abolish JHT Tax Emerges, Here's What Purbaya Says

Finance Minister Purbaya Yudhi Sadewa has said the government will review the income tax policy on old-age security (JHT) disbursements. The evaluation is being conducted to ensure that the prevailing provisions remain aligned with the principle of fairness for participants.

Purbaya explained to journalists in Jakarta on Tuesday that no final decision has been reached regarding changes to the JHT tax provisions thus far. The government will still review the current regulations and compare them with best practices in other countries.

“Not yet. We will see what the existing rules are like. And we will also compare them with global best practices,” Purbaya said.

According to him, the government is open to evaluating whether the tax treatment on JHT disbursements needs to be adjusted. Nevertheless, the policy direction will still consider the aspect of fairness for all participants.

“But it is only for fairness, everyone will pay. And we will check,” he added.

Purbaya stressed that the government wants to ensure the tax policy does not only burden certain groups. On the other hand, he continued, the evaluation is also necessary so that incentives or special treatment are not predominantly enjoyed by high-income groups.

One aspect that will be investigated is the profile of participants cashing out JHT with a value above Rp50 million. The government will look at how many participants fall into that group and whether the current policy is well targeted.

“That is up to Rp50 million, right? We will see how many pay above Rp50 million. It could be that I am only giving it to the rich. So I will investigate,” he said.