Indonesia Will Raise Its Tax-Free Income Threshold for the First Time in a Decade
The government plans to lift the ceiling and exempt everyone earning under 10 million rupiah a month, aiming to put more cash in people's pockets.
JAKARTA, Oct 1 (Reuters) - Indonesia plans to increase the tax-free income threshold for the first time in a decade, a senior minister said, a move aimed at increasing disposable income and spurring economic activity.
• Currently, no income tax is payable on annual income of 54 million rupiah ($3,020) or less. The threshold is intended to protect low-income earners and was last adjusted in 2016.
• Airlangga Hartarto, Coordinating Minister for Economic Affairs, said late on Wednesday that the government was calculating a "fix" to the threshold for next year, but gave no other details.
• On Thursday, Airlangga said the plan would not require adjustment to the 2027 budget deficit target of 2.40% of GDP as the government will ensure budget efficiency and expects higher revenue from the energy sector.
• An income tax exemption will be expanded to apply to all people earning less than 10 million rupiah ($557) per month. That currently applies only to workers in some labour-intensive and tourism industries.
• The government will allocate around 31 trillion rupiah for cash and food handouts to low-income people in the final quarter of this year, Airlangga added.
• A tax break on certain property sales will be extended to 2027, he said.
• The new stimulus steps are in addition to a package announced earlier this year.
($1 = 17,940.0000 rupiah)
(Reporting by Stefanno Sulaiman and Stanley Widianto; Editing by John Mair, Martin Petty)
