Wave of Layoffs Has Yet to Significantly Impact Tax Revenue in East Java II
The East Java II Regional Office of the Directorate General of Taxes (DJP) recorded positive performance, booking tax revenue of IDR 16.08 trillion, or 44.23% of the target, as of 31 July 2026. This achievement represents a 25.04% increase compared to the same period last year, proving that economic activity in the East Java II working area continues to develop positively and is supported by increased taxpayer compliance. This realisation is in line with the East Java regional performance, which collected IDR 63.64 trillion (44.03% of the target), and the national level, which reached IDR 1,209.6 trillion or 51.31% of the 2026 State Budget target.
Head of the East Java II DJP Regional Office, Arridel Mindra, stated that the recent phenomenon of layoffs (PHK) in several regional industries has not yet had a significant impact on tax revenue, particularly Income Tax Article 21 and Corporate Income Tax. He explained that most of the employees affected by layoffs had salaries below the Non-Taxable Income threshold, so they were not obliged to pay Income Tax Article 21 from the start. Furthermore, the corporate income tax contributions from the affected companies had already been minimal in recent years. He added that the potential decline in revenue in one sector was offset by the growth of new industrial centres in the Madiun and Ngawi areas, which increased the number of new taxpayers and stimulated the local economy.
As of the end of July 2026, the tax revenue structure of the East Java II DJP Regional Office was dominated by Domestic Value Added Tax (PPN) with a contribution of 31.55%. This was followed by Import VAT at 26.39%, Corporate Income Tax Article 25/29 at 17.17%, Income Tax Article 21 at 10.03%, and Import Income Tax Article 22 at 5.57%. In terms of business sectors, the manufacturing industry remained the main pillar of the economy in East Java II, contributing 56.10% of total revenue. The wholesale and retail trade sector was in second place with 21.64%, followed by government administration (7.48%), construction (2.10%), and other sectors (12.67%).
In addition to revenue performance, Arridel also presented the formal compliance achievements of taxpayers. As of 31 July 2026, the East Java II DJP Regional Office had received 740,053 Annual Tax Returns (SPT) for the 2025 tax year. This figure consisted of 671,253 SPTs from individual taxpayers and 68,817 SPTs from corporate taxpayers. This achievement was recognised as the result of optimised consultation services, the use of digital channels, continuous assistance and education, as well as appeals based on compliance risk analysis that are intensively carried out by the DJP.