Said Iqbal Urges Purbaya to Scrap Tax on JHT Withdrawals

Presidential Special Adviser on Labour Affairs and Workers’ Welfare, Said Iqbal, has urged the government to set the tax rate on Old-Age Security (JHT) withdrawals at zero per cent. He also proposed abolishing the progressive tax on JHT withdrawals. The statement was made during a meeting with Finance Minister Purbaya Yudhi Sadewa.

"It is unreasonable that a social savings scheme, which is a state programme designed to protect its people and safeguard workers and employees, is taxed on its savings," Said Iqbal stated at the Ministry of Finance office in Central Jakarta on Wednesday, 8 July 2026.

According to him, workers who experience termination of employment more than once can be subjected to a higher tax rate when they subsequently withdraw their JHT. On the first withdrawal, the tax rate imposed may be zero per cent or five per cent. However, when a worker finds new employment and is later laid off again, the subsequent JHT withdrawal can be subject to a progressive tax ranging from 15 per cent to 30 per cent. Said Iqbal noted that this policy has long been a source of complaint among workers who have experienced layoffs multiple times.

In addition to abolishing the tax, he also proposed that the government raise the tax-free threshold for JHT withdrawals. Currently, based on Government Regulation Number 68 of 2009, JHT withdrawals of up to Rp 50 million are not subject to tax. He considers this threshold to be no longer relevant as it was set approximately 17 years ago. According to him, the tax-free threshold should be raised to around Rp 400 million, taking into account the increase in the value of gold since 2009. This calculation is based on the value of Rp 50 million in 2009, which was equivalent to approximately 152 grammes of gold, a quantity now worth around Rp 400 million at current gold prices.

Beyond JHT, Said Iqbal also proposed the abolition of taxes on holiday allowances (THR), severance pay, and pension benefits. He argued that these three components are part of the state’s protection for workers and therefore should not be taxed again upon receipt.