Government Covers PPh 21 Tax for Tourism Workers

The Indonesian government announced on 29 October 2025 that it will fully assume the PPh 21 tax burden for workers in the tourism sector. The measure applies to all employers hiring staff in that industry.

PPh 21 is the income tax normally withheld from employees’ wages by their employers. Under the new facility, employers no longer need to deduct or remit this tax because the government will cover it.

The policy aims to lower labor costs for the tourism industry and make employment in the sector more attractive. Covering the tax will affect the national fiscal budget but may support economic activity in tourism.