Govt to Review Average Effective Tax Rate Scheme for PPh 21, 2025

The Directorate General of Taxes announced it will evaluate the Average Effective Rate (TER) scheme for PPh 21 at the end of 2025. The statement was made at a press briefing in the Ministry of Coordinating Economic Affairs on Friday, 24 October 2025.

The review will concentrate on technical aspects, chiefly the timing of income recognition and tax charging that have drawn attention from certain professions. Director General Bimo Wijayanto clarified that the TER scheme does not alter tax rates but adjusts timing so the burden is spread evenly throughout the year. Complaints from doctors and other professionals have begun to subside as understanding of the new mechanism improves.

The evaluation aims to assess the two‑year policy’s effectiveness in simplifying tax administration and maintaining stable cash flow for workers. Findings may lead to technical adjustments without changing PPh 21 rates. The government reaffirmed its commitment to monitor the policy’s impact on taxpayers.