Government Introduces Tax Incentives in First Year of

Tax Director General Bimo Wijayanto stated on 21 October 2025 that the Indonesian government has launched a series of tax incentives during the first year of President Prabowo Subianto and Vice‑President Gibran Rakabuming Raka’s administration. The measures aim to ease the tax burden on citizens and sustain business productivity.

Exemptions include personal income tax (PPh 21) for employees in strategic sectors such as footwear, textiles, furniture, as well as tourism, hotels, restaurants and cafés. The state also covers 100 % value‑added tax (VAT) on the sale of landed houses, condominiums, electric and hybrid vehicles, and on airline tickets to revive tourism. In addition, a final tax rate of 0.5 % applies to micro‑small enterprises with gross revenue between IDR 500 million and IDR 4.8 billion until 2029.

These actions are expected to lower tax costs for consumers and small businesses while encouraging investment in property, clean transport and tourism. The Tax Authority continues to strengthen inter‑agency collaboration to safeguard state revenue. The incentives will be monitored throughout the policy period.