Indonesia Slashes Author Royalty Tax to 1.5%

Indonesia's government is bolstering its creative industry, particularly the publishing sector, by significantly lowering the withholding tax on author royalties. A recent limited coordination meeting, led by the Coordinating Minister for Economic Affairs and attended by the Finance Minister and the Minister of Tourism and Creative Economy, approved reducing the tax rate from 15% to a final 1.5%.

This move is framed as an implementation of the President's commitment to address authors' long-standing concerns, which date back to 2017. The Ministry of Tourism and Creative Economy engaged in extensive consultations with authors, editors, illustrators, publishers, and associations from late 2025 to early 2026. A comprehensive study on the royalty taxation scheme was also conducted in collaboration with the Tax Policy Institute at the University of Indonesia.

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The reduction in PPh Royalties is an implementation of the President's spirit in responding to the aspirations of authors that have been fought for since 2017.

Officials expressed hope that this "stimulus policy" will not only motivate authors and creators to produce high-quality work but also promote a more robust and competitive publishing industry. Furthermore, it is anticipated to enhance tax compliance among writers. The Ministry of Finance will finalize the necessary regulatory changes for implementation in the latter half of 2026.

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The government hopes this stimulus policy will motivate authors and creators to continue producing quality works, encourage the growth of a healthier and more competitive publishing industry, and increase tax compliance.