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🇮🇩 Indonesia /Economy & Trade

Indonesia Reviews Tax Policy on Old-Age Savings Disbursement

From Republika · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • Indonesia's Finance Minister Purbaya Yudhi Sadewa is reviewing the income tax policy on the disbursement of old-age savings (JHT).
  • The review aims to ensure fairness for participants and assess if the current tax treatment is appropriate, especially for amounts over Rp50 million.
  • No final decision has been made, and the government is comparing current regulations with international best practices.

Indonesia's Finance Minister, Purbaya Yudhi Sadewa, announced that the government will re-evaluate the income tax policy applied to the disbursement of old-age savings (JHT). This review is intended to ensure the policy aligns with principles of fairness for all participants in the savings scheme.

We haven't yet. We'll see what the existing rules are like. And we will also compare them with what the world's best practices are like.

— Purbaya Yudhi SadewaExplaining the government's approach to reviewing the JHT tax policy.

Speaking in Jakarta, Minister Purbaya stated that no final decision has been reached regarding changes to the JHT tax regulations. The government is currently examining existing rules and benchmarking them against international best practices. "We haven't yet. We'll see what the existing rules are like. And we will also compare them with what the world's best practices are like," Purbaya told reporters.

The minister emphasized that the government is open to adjusting the tax treatment of JHT disbursements if necessary, with a primary focus on maintaining fairness. "But only for fairness, everyone will pay. And we will check," he added, indicating a commitment to equitable application of the tax.

But only for fairness, everyone will pay. And we will check.

— Purbaya Yudhi SadewaStressing the government's commitment to equitable tax application.

Furthermore, the evaluation will scrutinize whether current incentives disproportionately benefit high-income earners. Specifically, the government plans to investigate the profile of participants who withdraw JHT amounts exceeding Rp50 million to determine if the policy is effectively targeted. "That's up to Rp50 million, right? We'll see how many people pay above Rp50 million. Don't let me just give it to rich people. So I will investigate," Purbaya stated.

Don't let me just give it to rich people. So I will investigate.

— Purbaya Yudhi SadewaDetailing the focus of the investigation into JHT disbursements above Rp50 million.
DistantNews Editorial

Originally published by Republika in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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