Government announces Q4 2026 stimulus package (provisional Rp31 trillion): income-tax relief for workers under Rp10 million to be extended to all sectors from January 2027 and the PTKP to rise — amounts and regulations still to come

TaxUpdatedUpdated: November 8, 2026

On 4 October 2026 the Coordinating Ministry for Economic Affairs (spokesperson Haryo Limanseto) announced a set of programmes agreed at a meeting chaired by President Prabowo with Coordinating Minister Airlangga Hartarto and the Finance Minister. The provisional allocation is about Rp31 trillion, still being reviewed by the Finance Ministry. For employers the relevant item is income tax: the PPh Article 21 reduction for workers earning under Rp10 million a month is to be extended to all sectors, covering 7.5 million workers, and an adjustment to the non-taxable income threshold (PTKP) is being discussed with the Finance Ministry. The release gives no regulation number, start date or period for either, and we have found no regulation implementing them as of 20 October. The rest of the package covers rice aid for October–December 2026, a three-month wage subsidy of Rp300,000 a month for 13.3 million workers, housing VAT incentives extended to 2027, contribution discounts for non-wage workers, and internship and vocational programmes. Update, 26 October: at the 21 October cabinet session the Coordinating Minister presented four Q4 measures (rice aid, the wage subsidy, a one-person-one-account programme and a Christmas and New Year transport incentive), and the government-borne VAT on domestic economy flights, part of that transport incentive, is now in force as PMK 77/2026 (see our separate entry). We have still found no regulation for the PPh 21 or PTKP items. Update, 28 October: the nine measures for 2027 that the Coordinating Minister presented at the cabinet session target a January 2027 start; the PMK for the expanded PPh 21 relief is planned to be signed before 1 January 2027, and the PTKP rise has the President's approval in principle but no amount. Update, 8 November: the wage-subsidy part now has its regulation, Permenaker 16/2026 (see our separate entry); we have still found no regulation for the PPh 21 or PTKP items.

Key points

Source and status: press release HM.02.04/331/SET.M.EKON.3/10/2026 of the Coordinating Ministry for Economic Affairs, Jakarta, 4 October 2026; Antara reported it on 5 October. Its wording describes programmes being prepared, drafted, discussed or continued; it is not a regulation.
Income tax, PPh Article 21: the reduction for workers earning under Rp10 million a month is 'expanded to all sectors' for 7.5 million workers. The release states no period; it sits in the paragraph that begins with the programmes continuing in 2027, so we read it as a 2027 measure, which we have not confirmed.
The relief in force today: PMK 105/2025, established 29 December 2025 and in force 31 December 2025, makes PPh 21 borne by the government for tax periods January to December 2026 for employers in footwear, textiles and garments, furniture, leather goods and tourism with a KLU listed in its annex; for permanent employees the fixed gross pay limit is Rp10 million a month, and employees need an NPWP and/or NIK integrated with DJP's system and must not receive another PPh 21 DTP incentive (Ortax).
PTKP: an adjustment is being discussed with the Finance Ministry; no figure or date has been given. A change in the PTKP would alter withholding for every employee, not only those under Rp10 million.
Housing and mortgages: the VAT-borne-by-government (PPN DTP) facility is extended to 2027 for houses up to Rp2 billion, and for the first Rp2 billion of the price of houses up to Rp5 billion; a 6%-interest subsidised mortgage for fixed-income earners of about Rp17 million for houses up to Rp500 million is being prepared.
Workers and others: a wage subsidy (BSU) of Rp300,000 a month for three months for 13.3 million workers, budgeted at nearly Rp12 trillion; the work-accident and death contribution discount for non-wage workers continues in 2027; use of the job-loss benefit (JKP) for six months is adjusted to income; internships for 150,000 people and vocational training for 300,000 in 2027; rice aid of 10 kg a month for October–December 2026 (Rp17.5 trillion, 33,244,408 family beneficiaries); a bank-account programme for adults, focused on income deciles 1–4; and a new VAT standard for 99.9% precious metal being drafted.
Update (21–22 October): at the 21 October cabinet session the Coordinating Minister presented four Q4 measures (ifakta.co, 26 October): rice aid of 10 kg a month for October to December for 33,244,408 families (about Rp17.54 trillion); the wage subsidy (BSU) of Rp300,000 a month for three months for about 13.3 million workers (about Rp11.97 trillion); a one-person-one-account programme for people over 17, mainly in income deciles 1–4 (Rp1.28 trillion); and a Christmas and New Year transport incentive. Okezone (22 October) says the BSU covers October, November and December and describes recipients as workers earning Rp3.5 million, with no other criteria given, and that the account programme has an initial deposit of Rp50,000 for about 25 million people. The transport incentive is reported as a 30% discount on transport tickets, a 30% discount on ship fares, special ASDP port prices and government-borne VAT on domestic air travel, reaching 16.6 million people at about Rp883.4 billion; the VAT part is PMK 77/2026. No regulation for the PPh 21 relief or the PTKP has been published.
Update (24–27 October): the nine measures for 2027 were presented by the Coordinating Minister at the cabinet session marking two years of the government (DDTCNews, 24 October; PajakOnline, 27 October). (1) A national internship programme for 150,000 people, with allowance, work-accident and death insurance, a certificate and PPh 21 borne by the government; (2) a vocational programme with a 300,000 quota (together Rp5.68 trillion); (3) PPh 21 borne by the government extended to workers earning up to Rp10 million a month in all sectors, targeted to start in January 2027 for about 7.5 million workers, with the PMK to be signed before 1 January 2027; (4) a PTKP increase taking inflation and regional minimum wages into account; (5) government-borne VAT on housing for the part of the price up to Rp2 billion, with its PMK to be finalised before 1 January 2027; (6) a 50% discount on work-accident and death contributions for non-wage workers, requiring a revision of PP 50/2025; (7) additional job-loss (JKP) benefits; (8) subsidised mortgages for middle-income earners; and (9) a new VAT standard for 99.9% gold, requiring a revision of PP 49/2022 that would also allow a VAT incentive on silver. PajakOnline adds that the PTKP increase, now Rp54 million a year, has the President's approval in principle (State Secretariat letter B-40/M/SDK/KI.00/10/2026 of 20 October) and that Airlangga Hartarto and Finance Minister Suahasil Nazara are still calculating it, with no new amount set. None of the implementing regulations has been issued.
Update (8 November): the wage subsidy (BSU) now has its regulation. Permenaker 16/2026, established and promulgated on 28 October, sets Rp300,000 a month for three months, paid at once as Rp900,000, for Indonesian workers on BPJS Ketenagakerjaan through August 2026 who earn up to Rp3.5 million a month, or the local minimum wage where it is higher; Kemnaker says payment is scheduled for November to December 2026 (see our separate entry). For the PPh 21 relief and the PTKP we still found no regulation as of 8 November.

What this means for your Indonesian entity

Nothing in this announcement changes payroll withholding today. Until a regulation is issued, keep applying the rules in force: PPh 21 borne by the government only if your business is in the sectors and KLU covered by PMK 105/2025, with the conditions it sets, and normal withholding otherwise. When a regulation appears, three things will decide the payroll effect: the start date and tax periods; whether the all-sector relief carries conditions like those in PMK 105/2025, such as the employer's KLU, an integrated NPWP or NIK and no other incentive, which the release does not say; and whether the PTKP is raised, which would change withholding for every employee. Ask your payroll provider to be ready to change settings for 2027 tax periods. The wage subsidy, housing and contribution-discount items are outside an employer's own obligations unless your staff ask. This is orientation, not advice, and we will update this entry when a regulation is published.

Sources

This page summarises publicly available information for orientation. It is not tax, legal, or accounting advice, and regulations change. Verify against the linked primary sources and contact us before acting on anything here.

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