JAKARTA. The government has begun reviewing a proposal to increase the tax threshold for Old-Age Security (Jaminan Hari Tua/JHT) benefits from IDR50 million to approximately IDR400 million. The proposal was submitted by the President's Special Advisor for Labor and Workers' Welfare, Said Iqbal, during a meeting with Minister of Finance Purbaya Yudhi Sadewa at the Ministry of Finance on Wednesday (July 8, 2026).
According to Said, the current tax threshold for JHT benefits no longer reflects today's economic conditions. The existing tax provisions are still based on Government Regulation No. 68 of 2009.
"Under Government Regulation Number 68 of 2009, JHT benefits of up to IDR50 million are exempt from tax, while amounts exceeding IDR50 million are subject to a 5% tax. That regulation was issued in 2009, 17 years ago," Said stated on Wednesday (July 8), as quoted by Kontan.co.id.
Said argued that IDR50 million in 2009 had significantly greater purchasing power than it does today. Therefore, he proposed raising the tax threshold for JHT benefits to approximately IDR400 million. The proposed amount is based on increases in gold prices and inflation over the past two decades.
"It would be fairer if the tax on JHT benefits only applied to amounts exceeding IDR400 million," he said.
According to Said, Minister of Finance Purbaya Yudhi Sadewa responded positively to the proposal. However, the government still needs to assess its potential impact on state revenue before making any policy changes.
"He said it would indeed be fairer to use gold prices as a benchmark, or at least take inflation into consideration," Said explained.
He added that if the government decides to revise the JHT tax threshold, Government Regulation No. 68 of 2009 would also need to be amended.
"If the JHT tax provisions are revised, Government Regulation No. 68 of 2009 must also be amended because the regulation is already quite outdated," he added.
In addition to proposing a higher tax threshold, Said also questioned the government's data indicating that around 95% of JHT participants withdraw benefits of less than IDR50 million and therefore pay no tax.
According to him, the figure most likely reflects contract workers and informal workers who withdraw their JHT savings after relatively short periods of employment. He argued that if all participants of Indonesia's Employees Social Security Agency (BPJS Ketenagakerjaan) were to withdraw their JHT balances simultaneously, the proportion of beneficiaries receiving more than IDR50 million would likely be much higher.
For that reason, Said plans to seek clarification from BPJS Ketenagakerjaan regarding the data used.
Awaiting the Government's Assessment
Responding to the proposal, Purbaya said the government would conduct a comprehensive review. The assessment will examine its consistency with existing regulations, its impact on state revenue, and its economic benefits for JHT participants.
"We will review the existing regulations and assess their impact on state revenue as well as the economic impact on those who would receive the tax exemption," Purbaya said.
He noted that, based on the government's preliminary data, approximately 95% of JHT beneficiaries are currently subject to a 0% tax rate. However, the Ministry of Finance will request more comprehensive data from BPJS Ketenagakerjaan before deciding whether to revise the tax threshold for JHT benefits. (KEN)
