Tax Office to Review JHT Tax, Rp50 Million Threshold May Change

The Directorate General of Taxes (DJP) at the Ministry of Finance has opened the possibility of evaluating the tax provisions on the disbursement of Old Age Security (JHT) funds, including the current Rp50 million balance threshold that qualifies for a 0% tax facility.

Inge Diana Rismawanti, Director of Tax Dissemination, Services, and Public Relations at DJP, stated that any policy change requires in-depth study as the legal basis is enshrined in a Government Regulation. “Regarding the adjustment of Income Tax (PPh) on JHT, we need to review it again. Because if we want to change the rules, it is not easy, especially since the legal basis is a Government Regulation,” Inge said during a media briefing at the DJP office on Tuesday.

According to Inge, the evaluation could cover various aspects, from raising the balance threshold that receives the tax facility to changes in the tax rate applied to JHT disbursements. However, she emphasised that the policy direction will depend on the results of the study and input submitted to the Directorate General of Economic and Fiscal Strategy.

“We have to see first whether the proposal is to increase the threshold or to lower the rate. Everything can be studied, but of course it depends on the results of the review,” she said.

Finance Minister Purbaya Yudhi Sadewa had previously announced he would investigate workers’ protests regarding the tax on JHT. He stressed the importance of fairness in formulating tax policy, expressing concern that tax relaxation might only benefit high-income groups. “We will check, the 0% tax applies up to Rp50 million. We will see how many actually pay above Rp50 million. It could be that the relief only benefits the rich. So I will investigate,” Purbaya said after a working meeting with the House of Representatives’ Budget Committee.

Purbaya reiterated that the Ministry of Finance would be cautious in evaluating the policy to avoid creating inequality in benefits. “We must not cut taxes in a way that only the rich profit,” he asserted.

Previously, Said Iqbal, Special Adviser to the President on Employment and Labour Welfare, confirmed he would send a letter to the Finance Minister to discuss the final income tax imposed on JHT withdrawals. He advocated for the complete removal of the tax on JHT payouts.